Global Times’ editor-in-chief, Hu Xijin, delivers a warning
The Global Times is a sounding board for Chinese authorities and one of the key figures in delivering key messages is via its editor-in-chief, Hu Xijin, who said on his WeChat account that Evergrande should turn to the market for any salvation, not the government.
Adding that Evergrande’s potential downfall is unlikely to trigger a systemic risk akin to that of Lehman Brothers i.e. downplaying the assumption that the company was “too big to fail” and that the government will eventually bail them out.
While not necessarily a confirmation of what to expect, it does fit with the current line of thinking surrounding China at the moment. My thoughts from yesterday:
Evergrande is the name that stands out as the poster boy for all of those worries, as the company is being made an example of the broader crackdown that China is trying to push forward with across most, if not all, major industries right now.Don’t get me wrong. China has the tools at its disposal to easily bail out Evergrande and prop up the economy. It just isn’t choosing to do so at this moment for one reason or another, be it debt worries or just plain power consolidation.