, Columnists
How an Evergrande Collapse Would Cascade Through China
The country’s supply chain is a strength but also a risk. One big default could lead to a domino effect of small and medium-size business failures.
The China Evergrande Group logo.
Photographer: Bloomberg/BloombergThis article is for subscribers only.
On Oct. 15, the People’s Bank of China assured investors that China would be able to ring-fence the risks that China Evergrande Group’s collapse posed to the financial system. Representatives from the central bank noted that only one-third of the firm’s liabilities were owed to financial institutions, and that the exposure of individual banks was relatively small.
This is hardly reassuring.