Evergrande Group and China's Debt Challenges (CRS Report for Congress)
| Release Date |
Revised Aug. 8, 2024 |
| Report Number |
IF11953 |
| Report Type |
In Focus |
| Authors |
Karen M. Sutter, Michael D. Sutherland |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
Since 2021, some Members of Congress have raised
concerns about the People’s Republic of China (PRC or
China)’s debt levels and the solvency of PRC property
developers. The inability of Evergrande Group, China’s
second largest property developer, to repay its domestic and
foreign debt highlights issues related to the structure and
operations of PRC firms in China and offshore, and the role
of the state in PRC firms, generally and in times of crisis.
While U.S. firms’ direct exposure to Evergrande is about
$348.4 million, according to Bloomberg, the case raises
broader issues for Congress, including (1) foreign creditor
rights in PRC corporate restructurings; (2) potential opacity
and risks in how PRC firms are structured, operate, and
report; and (3) potential risks in China’s economy.
Congress directed U.S. audit oversight of and reporting
requirements for PRC firms in P.L. 116-222, and is
considering other U.S. investor protections, reporting
requirements for PRC firms, and restrictions on certain
U.S.-China trade and investment activity. For related issues
before Congress, see CRS In Focus IF11667, China’s
Economy: Current Trends and Issues, CRS In Focus
IF11803, U.S. Capital Markets and China: Issues for
Congress, CRS In Focus IF12212, U.S.-China Auditing
Agreement and Issues for Congress, and CRS In Focus
IF11284, U.S.-China Trade Relations.
