Hong Kong-based news outlet The Standard rules out a Lehman Brothers-like crisis of troubled Chinese real estate developer Evergrande after last week’s speculation about the problem of a debt of more than 300,000 million dollars.
However, The Standard goes on to explain why the market is still concerned.
Key comments
“The main reason is that Evergrande’s debt equals 2% of China’s GDP“.
“In addition, investors are worried about a domino effect, sharp falls in property prices and the impact on other businesses. “
“Also can affect the ability of companies to finance and issue bonds, thus wreaking further havoc on China’s real estate market and another “Lehman storm.”
“However, unlike the US market between 2007 and 2008, China’s market does not have too many complicated financial products that may affect the operations of the housing market and Beijing’s ability to control and monitor the market is better than that of the United States“.
“Therefore, an Evergrande collapse may have a short-term impact, but in the long-term, the market may have many opportunities.”
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