China

Dubai World 2010 to China Evergrande Group 2021; Looking Beyond Leverage

From a bird’s eye view, the Evergrande debt crisis of 2021 and the Dubai world real estate crisis of 2010 would seem very close. In both the debacles, the supply outstripped the demand and leverage, being the double-edged sword, hampered the company finances with timely contractual obligations due in a period marked with high volatility and liquidity crunch. Evergrande group has debt worth USD 88.8 billion in 2021 relative to Dubai World’s debt of roughly USD 59 billion in 2010....

Implications of the Chinese Crisis for GCC Economies & Markets

According to a report published by Marmore (Is China Stalling?), the ensuing volatility in global markets was exacerbated by fears of rapid economic slowdown in China - the largest economy in the world (PPP terms), which stoked fears of impending global recession and led to a massive sell-off. Figure 1: Black Monday (August 24, 2015) Source: Reuters China, which now accounts for almost 15% of global economic growth, was perceived as an important global growth driver. Economists opined Chinese growth...