How China Evergrande’s Debt Troubles Pose a Systemic Risk

The China Evergrande Centre building sign is seen in Hong Kong on Aug. 25, 2021. Tyrone Siu/Reuters

HONG KONG—China Evergrande Group has raised fresh warnings of default risks amid late payments to wealth management and trust products.

The real estate giant has been scrambling to raise funds it needs to pay lenders and suppliers, with regulators and financial markets worried that any crisis could ripple through China’s banking system and potentially trigger wider social unrest.

Who Is Evergrande?

Founded in 1996 by Chairman Hui Ka Yan in the southern city of Guangzhou, Evergrande accelerated its growth in the past decade to become China’s second-largest property developer with $110 billion in sales last year.