Evergrande Unraveling Exposes Chink In China's Armor

The unraveling of the Evergrande property firm in China is seen to give credence to the fear voiced out by billionaire hedge fund investor George Soros on the status of the economic meltdown he sees forthcoming in the second biggest economic powerhouse in the world.

Photo Insert: The Evergrande Center

Already, the $300 billion meltdown of Evergrande has occupied a center spread in all business journals all over the world detailing the financial catastrophe that may result due to a possible default in the payment of loans due within the year.

On top of this, the suspension of the IPO of Alibaba Group and the fall from grace of Jack Ma has ratcheted the fear from investors on the ways of doing business in China..with Soros' musings on the way China is doing business in an opaque way.

And in an exclusive by the New York Times written by Alexander Stevenson and Cao Li, Evergrande had even sought cash loans from their employees.

"When the troubled Chinese property giant Evergrande was starved for cash earlier this year, it turned to its own employees with a strong-arm pitch: Those who wanted to keep their bonuses would have to give Evergrande a short-term loan, Stevenson and Li wrote.

Because of this, "workers tapped their friends and family for money to lend to the company. Others borrowed from the bank. Then, this month, Evergrande suddenly stopped paying back the loans, which had been packaged as high-interest investments."

The duo said that "Now, hundreds of employees have joined panicked home buyers in demanding their money back from Evergrande, gathering outside the company’s offices across China to protest last week.

Touted as a prolific property company, Evergrande saw its debts balloon to more than $300 billion and is yet to deliver unfinished apartments to home buyers.

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