* The policies forced deleveraging to improve financial health for the real estate sector;
* The government is moving to address debt build-up in the sector and we have high confidence in the scope of these policies;
* Future access to financing will be predicated on developers’ adherence to strict criteria including liability to asset ratio (excluding advance receipts) of less than 70%, net gearing ratio of less than 100%, and cash to short-term debt ratios of more than 1x.
The Chinese government forced Evergrande and other property developers to get less debt but Evergrande was too indebted and could not adjust.
Asianometry believes that Evergrande will be broken up but the Chinese government will protect the banks holding the debt.
SOURCES -Wikipedia, Asianometry, UBS
Written by Brian Wang, Nextbigfuture.com
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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