Since the 2008 global financial crisis, the Chinese financial system has grown to become systemically important. Yet it is not clear that the international financial safety net has the resources to protect the world from the associated risks.
LONDON – As the International Monetary Fund and the World Bank prepare for their annual meeting next week, all eyes are on Evergrande, China’s second-largest property developer, which apparently cannot repay about $300 billion it currently owes to banks, bondholders, employees, and suppliers. With the property giant teetering on the edge of bankruptcy, the world is being forced to contemplate a scenario it had never seriously considered: a made-in-China financial crisis.
LONDON – As the International Monetary Fund and the World Bank prepare for their annual meeting next week, all eyes are on Evergrande, China’s second-largest property developer, which apparently cannot repay about $300 billion it currently owes to banks, bondholders, employees, and suppliers. With the property giant teetering on the edge of bankruptcy, the world is being forced to contemplate a scenario it had never seriously considered: a made-in-China financial crisis.