Billionaire George Soros has said that he sees a huge crisis that is growing inside of Real
Estate Market in China
As for the reasoning for his statements, George highlighted a few reasons why he thinks that way. When BlackRock entered the Chinese market, George Soros showed concern, saying that bringing in billions of worth of wealth into the country was a very harmful mistake. George continued by saying that clients of BlackRock will lose money off of it, and the important thing to note is that the National Security Interests of the United States and many other democratic companies around the world will be harmed.
Investors in Trouble
As we know, Chinese investors have been having quite a rough time this summer season. Wealth worth Trillions were lost, now known to be one of the worst ever months in the history of the country’s time. Hedge funds have been the reason for a low amount of exposure that includes many companies which are based in the United States, that are living on the sales numbers in China. Net Holdings in the past few months received a 26% drop, hurting the system further.
Although the Chinese government has been working to keep markets stable, the rating drop of the Evergrande’s Bond ratings, implemented by the official Chinese Credit Rating, has started to make investors a lot more worried about the overall situation. The Evergrande’s credit rating had been dropped by 3 points, which means that it might be getting close to the default. Adding to that, Evergrande’s debt has risen up to a value of $300Billion. Reports from sources revealed that Evergrande had to pay back the paint supplier in the form of property in order to keep up with the debt.
Because the Debt is so massive, crossing the entire GDP of Greece, it is still unclear if the Chinese Government will have to come into action in the case of bankruptcy. The USA and Europe will most likely benefit from this because investments would shift towards the west side, and the growth of CNY will also contribute to the slowing of the market, increasing the cost of overall exports.