Global Macro Service > Research Briefings > China

Evergrande's restructuring is key to containing damage

Concerns over the rising default risk of Evergrande, the property developer, have roiled financial markets over the last week. While we think the government doesn’t want to be seen as engineering a bail out, we expect it to step in to conduct a managed restructuring of the firm’s debt to prevent disorderly debt recovery efforts, reduce systemic risk, and contain economic disruption.

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