Caixin
Oct 21, 2021 06:54 PM
FINANCE

Central Bank Chief Says Evergrande Risks Are Controllable

What’s new: People’s Bank of China (PBOC) Governor Yi Gang joined the chorus of officials reassuring investors and homebuyers that the fallout from the Evergrande crisis can be contained.

At a banking seminar Sunday, the central bank chief said he’s confident that the risks from China Evergrande Group are controllable and systematic risks can be avoided.

Answering a question about whether the Chinese government needs to step in to prevent Evergrande’s debt crisis from undermining the financial system, Yi said the risks from Evergrande — primarily missed debt payments, the suspension of some construction projects, and uncertainties about delivering pre-sold apartments on time — are isolated and the spillover to the finance sector is controllable.

Yi said the Chinese government will prevent Evergrande’s problems from spreading to other real estate companies and to the finance sector, and will protect the rights and interests of creditors and property owners.

The background: Yi echoed Zou Lan, head of the PBOC’s financial market department, who made similar comments at a press briefing last week. Chinese Vice Premier Liu He also recently reassured the public that risks in the country’s property market are controllable.

Defaults by real estate developers such as Evergrande and Fantasia Holdings Group Co. Ltd., combined with a downturn in the property market, have put investors on edge.

Evergrande’s stock slumped Thursday after a proposed $2.6 billion sale of its property management unit fell through. Evergrande has more than $300 billion in liabilities.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

This story has been corrected to reflect that the banking seminar took place on Sunday.

Related: Caixin’s coverage about Evergrande’s debt crisis

Contact reporter Zhang Yukun (yukunzhang@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)

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