“We believe Beijing would only be compelled to step in if there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy.” On Thursday, Evergrande has an $83.5 million interest payment it is likely to miss, which would cause more market turmoil.
NYT
For decades, China’s property market seemed to have no limits. Developers like Evergrande built cities from dirt, created jobs, gave the middle class something to pour its savings into and enriched local governments that sold them land. Along the way, they helped create economic growth that stunned the world.
NYT
China might actually welcome an Evergrande sparked financial meltdown in the belief it has special authoritarian powers to survive it, like with Covid, while the West succumbs.
The difference is that China can always turn crises into opportunities, and achieve its own structural reform and transformation.
People’s Daily
Biden also has his own special sauce called modern monetary theory. The idea is you can print money and soak up inflation with taxes.
MMT says that governments create new money by using fiscal policy and that the primary risk once the economy reaches full employment is inflation, which can be addressed by gathering taxes to reduce the spending capacity of the private sector.
Wikipedia