Nqophisa Diko is a research assistant at the Institute for Pan-African Thought and Conversation at the University of Johannesburg and a PhD candidate in international relations at the University of Pretoria.
Over the past few weeks, there have been many conversations about how Russia’s war on Ukraine will affect global economies. But right now, there is also a financial crisis looming in China that will affect many countries around the world, including South Africa.
One of China’s largest real estate development companies, Evergrande, found itself in a financial crisis when it missed its deadline to pay interest to international investors in September 2021.
This sparked a panic in the world of global investing, as is usually the case. Evergrande’s missed deadline revealed its debts, estimated at more than $300 billion. This makes Evergrande the most indebted real estate company in the world.
Why is this important? When a company as large as Evergrande faces such large losses, it indicates that there are more problems on the horizon.
One of the main indicators of the economic crisis of 2008 was the collapse of the US housing market in 2007. This created a ripple effect on the global economy. The collapse was caused by insufficient regulations,…