China Evergrande faces debt of £ 221 billion, and an expert has claimed the company’s collapse could trigger the downfall of the financial system. Speaking to Express.co.uk, Dr Marco Metzler of Deutsche Marktscreening Agentur (DMSA), claimed that the collapse of Evergrande was the first domino of the eventual destruction of the global financial system. Due to the size of the property market, estimated at $ 55 trillion (£ 40 trillion), he claimed that the collapse of the Chinese property market would lead to a worse financial crisis than that seen in 2008.
Dr Metzler said: “This is the first domino of the market collapse. “
He added: “It will be even worse than the financial crash of 2008.
“The market is bigger than the United States was.
“If the market does not collapse, we will have hyperinflation and it will have the same effect on the economy. “
China Evergrande is one of the largest companies in the world and one of the largest in the country’s real estate market.
Due to the increased restrictions on foreign loans, Evergrande had to face several bond interest repayments.
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He added, “People say you can throw the box on the road, but we’re at the end of the line.
“It’s a matter of time, we have high inflation and low interest rates.
“Inflation is driven by the lack of goods and China has an energy problem.
There are fears in the financial market, because if such a large company goes bankrupt, it could scare lenders around the world.