What Is China Evergrande and Why Is It In Trouble?

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Hui founded Evergrande (formerly called the Hengda Group) in 1996 in the southern city of Guangzhou and expanded the company through massive borrowing. Evergrande Real Estate owns more than 1,300 projects in 280 cities, according to a company website. At the end of June it was committed to building the equivalent of about 1.4 million individual properties, according to Capital Economics. The group goes far beyond homebuilding, with investments in electric vehicles (Evergrande New Energy Auto), an internet and media production unit (HengTen Networks), a theme park (Evergrande Fairyland), a soccer club (Guangzhou F.C.) and a mineral water and food company (Evergrande Spring), among others. With more than 200 offshore and almost 2,000 domestic subsidiaries, Evergrande has about 2 trillion yuan ($310 billion) in assets — equivalent to 2% of China’s gross domestic product, according to Goldman Sachs Group Inc. calculations.

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