The Evergrande liquidity crisis is currently an unresolved financial crisis centered around the financial troubles of the Chinese real estate developer Evergrande Group. Evergrande’s potential bankruptcy has long been a source of turmoil in the stock market, and earlier this week the company missed another installment of its huge debt.
But even if Evergrande collapses, the Danes will not have to fear for their pension savings, as they are also invested in other assets, says Andreas Østergaard Nielsen BT. Andreas Østergaard Nielsen is Head of Analysis at Forsikring & Pension, the Danish professional association for insurance and pension companies.
“There will likely only be a temporary crisis in the financial markets if Evergrande goes bankrupt and Danes’ pensions are invested in many assets other than stocks. Assets that are free, ”he says.
The major problems in the Chinese real estate market have recently attracted international attention for fear of the consequences. With a debt of 300 billion dollars, the giant Evergrande has become the most prominent example and several have linked the situation to the crash of the American investment bank Lehman Brothers in 2008, which helped trigger the financial crisis.
However, it is unlikely that a crash in Evergrande will lead to an actual financial crisis, estimates Andreas Østergaard Nielsen. It can make waves in the stock markets, but the pension funds are long-term investors and so are not forced to sell.
Andreas Østergaard Nielsen also believes that customers who are about to retire are not particularly at risk in the event of bankruptcy. “Anyone who is about to retire does not have that many shares in the pension investments. So you won’t be hit that hard by unrest here, ”he says.
The Chinese Evergrande has been fighting for capital for the payments for several months. The company has not officially announced what will happen next.