China's property developers have grown at breakneck speed over the last decade, powered by huge amounts of debt. Authorities have started to rein them in with strict debt limits, but snapping an addiction isn't easy.
Evergrande is one of China's biggest property developers and among the most indebted companies in the world, owing more than $300 billion. It's creaking under the pressure and has recently failed to make numerous offshore bond payments.
Just before a 30-day grace period was set to expire, Evergrande wired $83.5 million Thursday to pay interest on an offshore dollar bond. But it faces more deadlines around missed bond payments, and $45.2 million in interest is due later in October. If Evergrande fails to cough up it will officially be in default.
The Evergrande crisis is now spreading to other developers and threatens to rock China's real estate sector, which economists say makes up around 30% of the economy.