Chinese Developer Evergrande Begins Legal Restructuring Amid 40 Trillion Debt

Evergrande's liquidation has formally begun, and how its 40-trillion-yen-plus debt is unwound matters beyond China—Taiwan readers should watch whether it spills into the yen, Japanese stocks and Asian risk appetite. The sheer scale is why this workout is unprecedented; a life sentence for the founder closes the chapter on accountability and shifts the question back to who gets which assets. The most concrete hurdle is delivering already-sold, not-yet-handed-over homes. This is the cleanup after a bubble: property expansion built on heavy leverage and rolling presale cash turns toxic once sales stall, and Evergrande is that model taken to the extreme. Paths: an orderly wind-down keeps risk inside China; delays in home delivery and debt handling widen damage to Chinese demand and imports; or markets seize on it and sell Asian risk broadly, sending haven flows back into the yen. If you hold China funds, treat Evergrande as the test of whether this round stays orderly. Yen holders: risk-off often means haven buying of yen, amplifying swings. Exporters of Japanese materials, machinery and consumer goods to China are tied to the same demand line. Watch home-delivery progress and whether the debt plan triggers fresh defaults—that decides whether this is an ending or a fuse.