The Evergrande Group's Debt Issues Could Be A Drag On China's Economy

TAICANG, China – The one-bedroom apartment was to be Penelope Wu's retirement home, an escape from the bustle of Shanghai – or, at least, that's how Evergrande, the Chinese property developer, painted it. To jump in line ahead of hundreds of other prospective home buyers, Wu paid the sticker price of about $200,000 in full last year, before construction had even broken ground.

"It did strike me as weird that Evergrande wanted the cash up front. I did not know then that they were so desperate for money," Wu says as she walks her dog outside her uncompleted building in Taicang's Cultural City project. The mixed-development project, an hour's drive from Shanghai, has been halted mid-construction as Evergrande scrambles to pare down its debt under orders from Chinese regulators.

Wu and the buyers of an estimated 1.4 million