The director of the financial markets department said the government would ensure individual house purchases were safe.
The People’s Bank of China said on Friday that the Evergrande Group’s debt crisis was an «individual phenomenon,» declaring that its real estate sector as a whole is stable. Positioned as the nation’s second-largest property developer, Evergrande employs roughly 200,000 people and said it creates 3.8 million jobs a year. Analysts fear the company could soon crumble under its over $300 billion of debt and create an economic fallout akin to the collapse of Lehman Brothers bank in the U.S. that precipitated the Great Recession. Recently, a number of smaller, but nonetheless significant firms, have shown signs of severe financial struggle. Greenland Holdings, E-house, Fantasia, and Modern Land have all seen their credit ratings drop with Fantasia being downgraded to near default status. Zou Lan, director of the People’s Bank of China’s financial markets department, insisted the situation is fine.
