Why China’s Evergrande Has Global Markets on Edge

For weeks, stock markets across the globe have become increasingly volatile as investors await the fate of Evergrande, an enormous Chinese real estate company with more than $300 billion in debt. Analysts predict that the property developer will not be able to pay back what it owes, which would likely have damaging ripple effects across the global economy. The video below looks at Evergrande’s current debt debacle and the possible ways that this situation could be resolved.

Questions:

1. Why are investors across the globe concerned about Evergrande’s mounting debt crisis?
2. How did Evergrande’s practice of pre-selling apartments lead to its current crisis?