- Analysts and economists have been warning about a bubble in Chinese residential real estate for at least a decade now.
- Evergrande’s problems were caused by their giant liabilities, and a recent shift in Chinese Communist Party economic doctrine and policy.
- The Party is faced with a terrible choice and has to decide which action is the least bad.
- If the state bails out Evergrande by restructuring their debt, this will create even more moral hazard in the Chinese credit system, and may lead to bigger crises in the future.
For further details see:
Evergrande: The Least Surprising Thing Ever