China Won’t Save Evergrande for Many Good Reasons
https://www.bloomberg.com/opinion/articles/2021-10-15/china-won-t-save-evergrande-to-prove-who-s-boss-to-its-reckless-developers
Many of the country’s debt-laden developers believe they are immortal because Beijing hasn’t proven that it’s serious about reforms.
My take:
https://thehill.com/opinion/finance/573971-chinas-future-hinges-on-xis-radical-economic-reforms
China’s dangerous reliance on its vast real estate sector to sustain growth and the resultant excesses of the property sector forced the country’s leadership to deal with the growing economic and financial distortions. Chinese authorities introduced the “three red lines” campaign in August 2020 to force deleveraging in the real estate sector.
Evergrande appears to be one of the major casualties of the campaign. The Chinese idiom “kill the chicken to scare the monkey” may explain the reluctance of authorities to bailout Evergrande as they attempt to signal the seriousness of their push to transition to a new growth model.
https://www.bloomberg.com/opinion/articles/2021-10-15/china-won-t-save-evergrande-to-prove-who-s-boss-to-its-reckless-developers
Many of the country’s debt-laden developers believe they are immortal because Beijing hasn’t proven that it’s serious about reforms.
https://thehill.com/opinion/finance/573971-chinas-future-hinges-on-xis-radical-economic-reforms
China’s dangerous reliance on its vast real estate sector to sustain growth and the resultant excesses of the property sector forced the country’s leadership to deal with the growing economic and financial distortions. Chinese authorities introduced the “three red lines” campaign in August 2020 to force deleveraging in the real estate sector.
Evergrande appears to be one of the major casualties of the campaign. The Chinese idiom “kill the chicken to scare the monkey” may explain the reluctance of authorities to bailout Evergrande as they attempt to signal the seriousness of their push to transition to a new growth model.