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How fall of Evergrande sent a shockwave through China: Analysis Updated: 2021-09-27 17:05:28 KST

As the crisis facing the world’s most indebted real estate company rages on, many experts have remained cautiously optimistic that the nightmare was under control.
But there are now growing fears that Evergrande's potential collapse will not be able to be contained as easily as many initially believed.
AND there's a reasonable chance it could end up shattering China's wider growth model along with it.
A Lehman Brothers moment for China?
It's the topic of our News In-depth tonight with Alicia Garcia Herrero, Chief Economist for Asia Pacific at (NA-teek-sis) NATIXIS, joining us live from Taipei. Thanks for joining us.


Alicia, first of all, help us identify the problem with Evergrande. What is the problem here?
Why is Evergrande in trouble?

Who do they owe this money to? Which parties are hit the hardest from this crisis? How are investors reacting?

Despite serious alarm over the Evergrande saga, many economic gurus have clung to the belief the government wouldn't let the company fail or - if it did - the threat facing the wider economy would be curtailed. But, we're beginning to see analyses that a "controlled explosion" might not be so easily contained after all. That it may eventually blow up China's entire economic growth model.
Why is this so?

Will Evergrande become the Chinese version of Lehman Brothers? What are the best and worst-case scenarios?

Why would it matter if Evergrande collapses? What wider ramifications does this have not only on the domestic market and globally?

Is this an example of structural challenges that the Chinese economy faces related to debt?

That was Alicia Garcia Herrero for us. Thank you for your insights.
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