Explained: China's Evergrande crisis that could singe global financial markets

Evergrande is one of china's largest real estate developers, employs about 2 lakh people. Concerns over the inability of the real estate giant to pay interest on its huge debt obligations. Evergrande share price has seen a major drop; many feel the developer is insolvent. The firm has warned investors of cash flow issues, saying it could default if unable to raise money. Evergrande group's debt spiralled over the years as it borrowed to finance various pursuits. Residential property demand in china is entering a period of decline. China's new rules on how much developers can borrow dealt a major blow to Evergrande. It is not as if the Chinese govt was unaware that new rules would hit heavily indebted developers. An impending collapse at the real estate giant may have a serious knock-on effect on china's economy. A collapse at Evergrande could singe the global commodities and financial markets. The Chinese govt is now trying to help settle the nerves; Evergrande continues to bleed.