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Letzte Aktualisierung: October 7, 2021

Evergrande: How much risk is Beijing willing to accept in its financial market?

Huachen Automotive was forced into bankruptcy. Bank Huarong, on the other hand, was rescued. HNA has to go through a painful restructuring. And Evergrande? The decisions to rescue or restructure ailing companies expose Beijing's strategy towards financial market risks. The dilemma faced by Chinese planners is strikingly similar to that faced by regulators in Western countries.

No one can say that China is casting too wide a safety net in the crisis. In the first half of the year alone, dozens of large companies went bankrupt, leaving a combined €15 billion of debt. So the financial regulator and the central bank are certainly showing the strength to go bust. In a state economy, the government has the ability to rescue just about anything that runs into trouble. But it is holding back on interventions.
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