Evergrande was once the largest real estate developer in China, and also had the highest debt. The Evergrande model is a typical and epitome of the real estate industry - relying on high liabilities to drive the rapid expansion of asset scale. If the economy continues to prosper and real estate prices continue to rise, this model will undoubtedly be the fastest to make money. But there are always cyclical economies, and once the real estate market shrinks, this model will suffer a devastating blow. Today, The High Court of Hong Kong received a liquidation petition against Evergrande. Although legal procedures such as hearings still need to be performed, Evergrande's days seem to be coming to an end. Evergrande is expected to announce a preliminary debt restructuring plan at the end of July, but creditors are losing patience. Indeed, considering the actual situation of China's economy and real estate market, the possibility of Evergrande's debt restructuring being successful is relatively slim. In fact, it is not just Evergrande that is sad. For most real estate developers, the past two years have been a difficult hurdle to overcome. But what is doubtful is that once this high-debt model succeeds, real estate developers will make huge profits, but if it fails, banks and ordinary people will have to foot the bill.
