--- title: Stocks Are Falling as Investors Worry About Evergrande and the Chinese Real Estate Bubble description: Evergrande, a Chinese real estate developer, is shaking up markets across the globe and stocks are falling. Here's what you need to know. authors: - name: Mallika Mitra role: Contributing Editor url: https://money.com/author/mallika-mitra/ bio: Mallika Mitra is a contributing editor for Money, based in Chicago. She has covered investing and retirement for seven years and her work has appeared in CNBC, Bloomberg, Kiplinger, AARP, Barron’s, Bankrate, The Daily Upside, ETF.com, The Bond Buyer, PLANADVISER, PLANSPONSOR and Investopedia. education: Craig Newmark Graduate School of Journalism at CUNY Kalamazoo College at_money_since: 2020 articles: 395 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - CNBC - Bloomberg - Kiplinger - Barron's - Bankrate - WGN-TV - CBS News Radio - This Morning With Gordon Deal - Everyone's Talkin' Money social: - https://twitter.com/mitra_mallika - https://www.linkedin.com/in/mallika-mitra-4577a386/ published: '2021-09-20T16:36:52.000Z' modified: '2024-01-10T16:51:13.000Z' section: Economy and Politics tags: - News word_count: 518 canonical: https://money.com/stock-market-evergrande-chinese-property-bubble/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![The Chinese flag mixed with a photo of traders working at the New York Stock Exchange](https://img.money.com/2021/09/News-Stocks-Fall-Chinese-Property-Bubble.jpg) The global equity market is taking a hit today as investors worry about the high debt levels of one of China's largest real estate developers. The S&P 500 and Nasdaq, benchmarks of the overall stock market, were down more than 2% on Monday. The Chinese company Evergrande has more than $300 billion in outstanding debt and is facing a potential default. Some experts are [comparing](https://www.theguardian.com/world/2021/sep/17/chinas-lehman-brothers-moment-evergrande-crisis-rattles-economy) the situation to the collapse of Lehman Brothers during the financial crisis of 2007-08. While it might seem far away, the Chinese real estate bubble could impact your investment portfolio. Here's what you need to know. ## What is going on with China's real estate market? The real estate conglomerate Evergrande owns more than 1,300 projects in more than 280 cities in China, according to its [site](https://mobilesite.evergrande.com/en/about.aspx?tags=2). Now, the company is in trouble. Evergrande has been urgently trying to raise the money to pay back its lenders, investors and suppliers, but is [warning](https://www.reuters.com/business/china-evergrande-warns-further-property-sales-drop-liquidity-crunch-2021-09-14/) that it may have to default on the billions of dollars it owes. Earlier this month, the real estate developer also blamed negative media coverage for a decline in property sales, all while protests have broken out outside Evergrande's offices. The company has a $83.5 million payment due Thursday and another $47.5 million on Sept. 29, according to [Reuters.](https://www.reuters.com/world/china/china-evergrande-shares-plummet-default-risks-2021-09-20/) Evergrande isn't the only Chinese real estate company facing issues. Credit markets are pricing in the default risks for smaller rivals, and national home sales by value fell 19.7% year-over-year in August, according to *[The Wall Street Journal](https://www.wsj.com/articles/chinas-property-curbs-send-economic-tremors-11631707347).* Mark Williams, chief Asia economist at research firm Capital Economics, told *The Journal* that Chinese developers have borrowed too much money to expand over the last decade, and now authorities are trying to tighten policy. ## Why is the stock market down today? You may not be familiar with the Chinese housing market, but the repercussions are being felt around the world Monday, as investors who [didn't seem to be fazed](https://edition.cnn.com/2021/09/16/business/wall-street-evergrande-china/index.html) by the Evergrande situation in recent weeks finally took notice. Now, the real estate developer is being blamed for sell-offs across the global equity market. Hong Kong’s Hang Seng index suffered losses Monday as Evergrande's stock plummeted around 10% on Monday. Meanwhile, U.S. stocks were hit hard too, with the Dow dropping more than 650 points. The S&P 500 fell 2% and the Nasdaq Composite, 2.6%. Even crypto investors look to be shedding some risk, with [Bitcoin's](https://money.com/bitcoin-gold-stocks/) price sliding below $44,000 amid the global sell-off. It's scary that some analysts are comparing Chinese property bubble to the housing market crash that devastated the U.S. over a decade ago. But [other experts](https://markets.businessinsider.com/news/stocks/evergrande-collapse-markets-economy-lehman-brothers-fears-overblown-michael-burry-2021-9) say these worries are overstated, especially given the possibility of an intervention from the Chinese government. Still, volatile markets can also make investors a bit queasy. Just keep in mind that having a [well-diversified portfolio and regularly rebalancing](https://money.com/how-to-diversify-your-stock-portfolio/) will pay off in the long term. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/stock-market-evergrande-chinese-property-bubble/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Stock Market", "item": "https://money.com/stock-market/" }, { "@type": "ListItem", "position": 4, "name": "Stocks Are Falling as Investors Worry About Evergrande and the Chinese Real Estate Bubble" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/stock-market-evergrande-chinese-property-bubble/#webpage", "url": "https://money.com/stock-market-evergrande-chinese-property-bubble/", "name": "Stocks Are Falling as Investors Worry About Evergrande and the Chinese Real Estate Bubble", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2021-09-20T16:36:52.000Z", "mainEntity": { "@id": "https://money.com/stock-market-evergrande-chinese-property-bubble/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/stock-market-evergrande-chinese-property-bubble/#breadcrumb" }, "dateModified": "2024-01-10T16:51:13.000Z" }, { "@type": "NewsArticle", "headline": "Stocks Are Falling as Investors Worry About Evergrande and the Chinese Real Estate Bubble", "articleSection": "Economy and Politics", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2021/09/News-Stocks-Fall-Chinese-Property-Bubble.jpg", "width": 2457, "height": 1638, "caption": "News-Stocks-Fall-Chinese-Property-Bubble" } ], "author": [ { "@type": "Person", "name": "Mallika Mitra", "url": "https://money.com/author/mallika-mitra/", "@id": "https://money.com/author/mallika-mitra/#author", "description": "Mallika Mitra is a contributing editor for Money, based in Chicago. 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