Beijing is taking a high risk with Evergrande

The world is looking at Beijing: When will the point be reached where the government will intervene in the ever-worsening Evergrande crisis? After all, it’s about one of the most heavily indebted real estate groups in the world. Fear of contagion is increasing: at the beginning of the week, the shares of other companies in the industry and, for the first time, other international companies that at first glance have little to do with the real estate developer from the People’s Republic tumbled.

It is not impossible, but unlikely, that the fall of Evergrande will become “China’s Lehman Moment”, as some now fear. First, China’s financial market is far less internationally interlinked than the American one. Second, the Chinese state has many opportunities to turn things around.