China’s Evergrande: Signal for Chinese Economic Doom or a Stable Future?

In our interconnected world, when any “too big to fail” company faces a threat of a collapse, the ripple effect is felt everywhere and when that company is Evergrande with asset worth equivalent to 2%[i] of the world’s second largest economy, the ripple becomes large waves. For the last two months, investors worldwide have been on their toes, worried about the future prospects of the world’s fastest growing economy. There are lots of speculations regarding the extent and severity of this crisis. Some analysts are calling this event a ‘Lehman Moment’ alluding to the failure of the U.S. bank Lehman Brothers and posing a warning similar to the 2008 financial crisis, whereas others are not much worried because they are thinking that China’s state-owned financial system will be there for Evergrande if needed to prevent any economic collapse. Borrowing from the recent news, and expert analyses, I will be presenting my own exploration with actionable insights for relevant stakeholders in this article.

Evergrande: a brief introduction

Xu Jiayin, aka Hui Ka Yan in Cantonese, a man from a humbled background, founded Evergrande in 1996 as a residential property developer for a burgeoning middle class. In a relatively short time his company became one of the largest companies in Asia making him the richest man in Asia. The main business of this company is to buy land from local governments, develop and sell residential apartments to customers. Most of the time, apartments are sold before their construction is finished and the proceeds from those sales are used to finance further land purchases. There are two main reasons behind Evergrande’s astronomical growth in a relatively short period of time. First, at the time it started building homes for people China had just opened itself to the international market, had unprecedented per capita real income growth and people were moving from rural to city areas to lead a better life, which led to a boom in Evergrande’s apartment sales. The other reason is that Mr. Xu Jiayin, one of the “Poker playing billionaires of China”, is a well-connected businessman whose connections range from Chinese politicians to international fund managers who enabled him to expand his business based on significant leverage. Though property development is the core business of Evergrande, it expanded its business to an extremely diverse range of businesses like electric vehicles (Evergrande New Energy Auto), entertainment (HengTen Networks), a theme park (Evergrande Fairyland), a football club (Guangzhou F.C.), bottled water (Evergrande Spring), grains and oil, dairy, etc. with more than 200 offshore and almost 2,000 domestic subsidiaries[ii]. It is China’s second-largest real estate company in terms of total sales and employs over 200,000 employees and owns more than 1,300 projects in more than 280 cities. Along with its assets, the debt also expanded ominously.

Evergrande’s problem at hand

The current problem of Evergrande is its gargantuan amount of debt which caused the company to miss deadlines on interest payments leading the company to default and it warned investors in August 2021 that it is set to miss more deadlines. After the announcement, the share price dipped by 85% and its bonds, downgraded by Fitch and S&P, were traded 20 to 50 cents on the dollar. Below is a list of looming debt problems Evergrande is facing:

1. Evergrande missed a coupon payment worth $83.5m coupon on its foreign offshore bonds, which has only 30 days before triggering a default. It was also unclear about its future coupon payment. Its total outstanding debt on offshore payment is $20 billion, of which $7.4 billion is payable next year.
2. 1.6 million apartments to be completed[iii], already advance taken worth $200 billion[iv]
3. Owes more than $100 billion in payments Suppliers of cement, paint and rebar[v]
4. $6 billion from its own employees promising high returns and defaulted on the payment[vi]
5. Owes money to around 171 domestic banks and 121 other financial firms[vii]
6. Total liabilities worth over $300 billion and has to pay around $37 billion in interest and maturing debt over the next one year[viii]

Why and how Evergrande Reached Here

The amount of asset Evergrande has and the way it was doing its business, the company could have continued its business with little or no hiccups for some more years. Apart from business losses it incurred in most of its diverse businesses, there are three main reasons why Evergrande reached its current debt mountain top.

Chinese government’s cracking down on leveraged property developers

The event that triggered the fall is Chinese government’s imposed “three red lines”- metrics regarding debt that developers will have to meet if they want to borrow more. On August 2020, the following three restrictions were imposed to cut the debt tendency of property developers[ix]:

1. a 70% ceiling on liabilities to assets, excluding advance proceeds from projects sold on contract,
2. a 100% cap on net debt to equity,
3. a cash to short-term borrowing ratio of at least one.

These ceilings, though somewhat stricter, were necessary for preventing an asset bubble. Where most of its peer were compliant with these red lines, Evergrande breached all of these. Before meeting these lines, it couldn’t take any more loans to serve its present obligations leading it to sell its businesses at fire sale prices[x] and this was still insufficient to repay its loans, resulting in insolvency.

China’s slow property market

The other reason is the slowing down of the residential property market in China. Citing “weak demand and slowing sales”, the National Institution for Finance and Development of China declared the property market boom has already ?“shown signs of a turning point”[xi]. With 29% of economic output contribution and 85% of a family’s assets[xii], the slowing down of the property sector will lead to a slowdown of China’s overall economic growth “in a self-perpetuating cycle, which could further erode demand for Evergrande’s properties.”[xiii] Evergrande has 800 unfinished project which are already pre-sold. It slashed the new apartment price to entice new buyers but apparently failed. Sales dropped 7.1 percent in value in July and 18.7 percent in August compared to the same months last year[xiv]. The overall growth forecast has been reduced for China (5.3% from 6.2% by BoA). “Heavy truck production and heavy truck sale”, Alan Greenspan’s (former fed chair) favorite indicator of economic strength, plummeted by nearly half in August from a year earlier[xv]. Passenger car sales are also showing slowing signs. Overall, China is facing a dip unlike its last three decades’ buoyant economic performance, characterized by overcapacity in many industrial sectors, coupled with a faltering construction sector.

Evergrande’s unsustainable business model

From a standalone company perspective, according to some analysts, the business model of Evergrande has been unsustainable for a long time. In 2012, Andrew Left of Citron Research claimed, based on an anonymous 68-page document, that Evergrande was insolvent and that the company was engaged in aggressive accounting practices to cover up its troubles. At that time Evergrande was little known outside its domestic market and Andrew Left faced legal action from China’s market regulator claiming he was disseminating “false or misleading information” and banned from the territory’s financial markets[xvi]. The company used to keep the unsold property in the balance sheet as inventory. In this way, it could avoid booking losses. In some cases, the business model looked like a Ponzi scheme as it relied on the constant inflow of funds to prop up a business model that was fundamentally unsustainable. This also allowed the company to report enough profit with a healthy balance sheet to entice fund managers like Blackrock, BlueBay, Ashmore and UBS[xvii]. It also raised money from its own employees ($6 b).

However, the last 2021 interim report of Evergrande Property Services Group Limited, audited by PwC, showed 68.3% revenue growth, 68.7% gross profit growth with a margin of 37.2%, 68.6% net profit growth over the same period last year. Of the total asset RMB 22,710 million, RMB 2,702 million (12%) is intangible asset of which RMB 1,629 million (60%) is “Goodwill”. In terms of assets, Evergrande has 1.4 trillion yuan ($215 billion) of land and partially completed projects with relatively stable prices[xviii].

Among the above three reasons two are related to the Chinese economy and the other is company specific. Since the Chinese system lacks transparency, we can only speculate what might happen next. The speculation differs considering the analysts’ background and location. Before speculating what might happen, we need to have an idea what might happen if Evergrande potentially collapses.

Impacts: Why Collapse of Evergrande is not China’s “Lehman Moment”

The impacts of Evergrande’s collapse can be grouped into two types.

Impacts: Inside China

In the event of a collapse of Evergrande, the following domestic stakeholders will face the most negative impacts:

1. The 1.6 million customers who advanced around $200 billion and did not get their apartments delivered will potentially lose their money causing a nationwide upset and protests.
2. All the related business partners including construction and design firms and materials suppliers will see a major loss, probably causing bankruptcy for many of them. Many have already brought lawsuits against the company, mounting extra pressure for it.
3. Many of the 200,000 employees working in the company might lose their jobs and the money invested by them in the Evergrande ($6 b) will vanish.
4. The financial market of China will take a major hit as Evergrande owes money to 171 domestic banks and financial institutions. This will have far reaching impacts because default from Evergrande will increase the bad loans for all of 171 financial institutions which will cause them to lend less as their required provision amount will increase. This might create a credit crunch where the domestic companies will find it hard to get loans at an affordable rate which will ultimately rein in the economic growth of China.
5. Fallout for large company involved in the most important asset development projects for Chinese will certainly have some political repercussions for Mr. Xi Jinping.

Impacts: Outside China

Out of the mammoth debt of Evergrande (around $300 billion), foreign currency bonds constitute only $18 billion which include both Chinese banks and foreign financial institutions. Of this amount $7.4 billion is payable to foreign investors next year. Directly, on the event of a total collapse, all this foreign debt will vanish into thin air. Already, the bond price tumbled to as low as 24 cents. An S&P analysis of the court restructurings of almost 50 defaulters in China showed that the average cash recovery rate for unsecured debtors was only 23.7 per cent[xix]. However, according to FT, direct spillover into the international market is limited beyond Asian high yield bonds. In terms of having a serious international ripple effect like the collapse of Lehman Brothers in 2008-09 financial crisis did, the probability is slim. There are several reasons for that:

• Unlike Lehman Brothers whose assets mostly constituted financial assets the value of which can be rapidly swindled, the assets of Evergrande mostly include land and partially completed real estate projects the value of which is not volatile in the short run.
• Even if the value of the assets diminishes rapidly which is almost impossible, the Chinese banking system generates enough profit (1.9 trillion yuan) annually with a reserves of 5.4 trillion yuan against bad loans can easily neutralize the impact[xx].
• Lastly, the grip and resource that the Chinese government has over its economy enables it to implement any policy it wants as per the situation demands. It is to be remembered that the Evergrande crisis was triggered by the government in the first place. Taking lessons from the 2008-09 crisis and seeing early signs, the government imposed the three red lines to prevent companies like Evergrande from creating any asset bubble. The situation, in my opinion, is well under Chinese government anticipation and control.

According to the IMF’s Chief Economist, “China has the tools and the policy space to prevent this turning into a systemic crisis.”[xxi] According to the Fed Chair “there’s not a direct United States exposure,” and the Chinese banks are “not tremendously exposed” either.[xxii] He opines “that it would affect global financial conditions through confidence channels and that kind of thing.” The contagion danger was similarly dismissed by European Central Bank President Christine Lagarde, who thinks direct exposure in Europe is “limited.”[xxiii] Agreeing with these experts, I also speculate that Evergrande is not a “Lehman Moment” for China or the world.

What lies ahead

To speculate about what lies ahead, we have several scenarios to consider:

Scenario 1: Chinese Government Bailout

If Evergrande is considered “too big to fail”, the Chinese government has to bailout this company as it did for Chinese Bad-Debt Manager Huarong[xxiv]. However, Huarong was mostly owned by the state and it was created by the state to be the bad-debt manager in the first place. In the case of an Evergrande bailout, the government has to inject a significant amount of fresh cash which will devalue its currency which is something that has an economy wide impact. The possibility of a bailout is not absolutely negligible because as recently as last week China’s central bank injected a net RMB110 billion into the country’s financial system. However, Beijing, though fears that the collapse of Evergrande would send tremors across the economy[xxv], has not shown any interest whatsoever in bailing it out because it is against the government stance to curtail the debt habit of property developers and Xi’s famous phrase that “houses are for living in, not for speculation,” made in a 2017 speech[xxvi]. In addition, Beijing does not believe that Evergrande is too big to fail[xxvii].

Scenario 2: China’s largest ever restructuring of Evergrande

In this scenario, a restructuring is processed with some influence from the government through which a liquidation will be avoided by keeping the core business running while selling the non-core assets to minimize loss for creditors. In this way, Beijing will be able to maximize the value of Evergrande’s assets. Evergrande has a number of non-core assets that can be sold to reduce the debt burden:

• Ocean Flower Island, an Rmb100bn ($15.5bn) project that is set to fully open next year and includes hotels, theme parks and an opera house
• Evergrande New Energy Auto
• HengTen Networks
• Evergrande Fairyland
• Guangzhou F.C.
• Evergrande Spring

This scenario is plausible because on the one hand this step is protecting the interest of general public by finishing their apartment construction and delivering on promises thus the Chinese government will win public sentiment, which is critical as Mr. Xi is just a year away from an unprecedented third term in power and on the other hand, through this restructuring he will be tacitly reprimanding the type of reckless borrowing behavior that has gotten Evergrande and other similar sized companies like Anbang Group Holdings Co. and HNA Group Co. into their current uncomfortable debt situation[xxviii].

Scenario 3: Chinese government doing nothing

In this scenario, the Chinese government will not intervene to save Evergrande and let the country’s legal system and the company itself decide its fate. This is also a probable scenario because:

1. Earlier this year the Chinese government did not intervene in a Chinese court rule to begin bankruptcy proceedings of the conglomerate HNA Group Co. sending a signal of its strong stance against reckless borrowing behavior.
2. President Xi Jinping can be expected to worry about national security which he largely attributes to financial stability and he indicated the perils of letting “gray rhinoceros,”[xxix] by which he means companies like Anbang Insurance Group, Fosun International, HNA Group, Evergrande and Dalian Wanda Group, get away without repercussions to Chinese financial stability.
3. Evergrande’s Chairman is still confident that the company will be able to “push through the pain”. “I firmly believe that Evergrande people’s spirit of never admitting defeat, and becoming stronger when the going gets tough, is our source of strength in overcoming all difficulties!”, he wrote to his employees in a memo to employees for Mid-Autumn Festival. Once the richest man in China, Mr. Hui has enough influence personally, financially and politically to get things done. Already the company has taken measures to pay its domestic investors[xxx], convinced people to take over some assets which brought some relief for the creditors. Whether he can wither this storm completely and come out successfully, only time will tell.

What’s likely: Chinese economic doom or a healthy future?

In my opinion, scenario 2 will be the most likely scenario because it is in the middle of being too harsh (scenario 3) and being too generous (scenario 1) and it protects the interests of the general public. In fact, recent events like the following indicate that:

1. Already it is looking for a deal for its electric vehicle company and it has sold its $1.5 billion stake in it held in Shengjing Bank.
2. At least two local governments of China took control of the sales revenue from Evergrande Properties showing the reason that “homebuyers’ interest can be protected and project construction is continued”[xxxi]. On top of that the biggest priority of Beijing should be to complete the unfinished project which can only be ensured through other developers and local governments taking over the projects and finishing construction and using the proceeds of further apartment sales to cover debts on a ‘region-by-region basis’.
3. According to S&P, Evergrande will not receive any government bailout predicting the company will default and expects “Beijing will seek an ‘orderly restructuring’”[xxxii].
4. Experts like George Soros and Jim Chanos believe that an Evergrande fallout can be worse than Lehman for China and the international effects will be less[xxxiii]. They think the overall Chinese economy, one third of which is driven by the real estate sector, might crumple if the property sector gets a shock. Scenario 2 is the most effective way to prevent something like that without being soft on ‘grey rhinos’.

Therefore, to answer the question whether the Evergrande situation, which largely occurred due to Chinese government’s deliberation, is an indication of a doom for the Chinese economy or of a stable future, I would go against George Soros and predict a stable economic future for China. It has already been proven that the Chinese government is prudent enough to realize the potential of an asset bubble before it happens and impose the three red lines for property developers and I hope it will also be strict enough not to let any grey rhinos get away without repercussions, setting an example of a strong stance against future reckless borrowers, which the USA failed to do in its 2008-09 crisis.

Sectors getting impacted by Evergrande fallout

The Evergrande fallout will certainly have an adverse impact on the Chinese real estate market. Confidence in all the property developers will wane. People who have already put their money for the apartment might want their money back and new customers will think twice before investing in this sector. Over capacity is already hampering the sector and the current fallout will, according to the experts, be the last nail in the coffin. But will the impact be limited to real estate only? There are lots of other sectors which are directly dependent on the real estate development. The basic materials sector in the UK is already down by 4.5% as on September 20, 2021. In Europe, steel company ArcelorMittal is down 6% in the same day. The commodities are, as indicated by the market movement, has adversely impacted already because real estate sector in China consumes them a lot, like steel for the structure or copper for the wiring. To measure the extent of the exposure, Tom Price at Liberum conducted a brief analysis[xxxiv]. China’s share of global commodities consumption is 40-70%. Of China’s total commodity supply, its property sector consumes: 40% of steel flow (380Mtpa = 20% of global total); 20% of copper (2.7Mtpa = 20% of global); 15% of aluminum (6Mtpa = 9% of global); 15% zinc (0.7Mtpa = 5% of global); 10% nickel (0.2Mtpa = 8% of global. Overall, Chinese real estate accounts for a fifth of all global copper and steel supply. Therefore, Evergrande’s collapse is potentially a big deal to the commodity world. Commodity companies in Australia and India who export in large quantities to the Chinese real estate sector should be worried about their sales in China in the last quarter of 2021, while other countries importing these commodities should enjoy a better price.

Should Bangladesh be worried

In case of the collapse of Evergrande, Bangladesh will not be affected directly because I could not find Bangladesh or any Bangladeshi investor having any stake in Evergrande. Of course, if the overall Chinese economy crumbles because of Evergrande, Bangladesh might get affected to some extent.

In 2019, total imports from China were $17.3 billion. The main product items were Refined Petroleum ($861M), Light Rubberized Knitted Fabric ($749M), and Light Pure Woven Cotton ($710M). We can expect no direct impact in the imports for Evergrande fallout and Bangladeshi importers will not likely face any shortages there. On the other side, iron and steel import of Bangladesh in 2020 was 5.2% of total import ($ 2.4 billion) which is one of her top 5 imports. Since the iron and steel demand will likely dampen for China’s slowing real estate sector, there should be an oversupply of iron, steel and other materials in the international market. Therefore, the importers of Bangladesh can expect a lower price of those commodities in the near future.

In 2019, Bangladesh exported $1.03B to China. The main product items were Non-Knit Men's Suits ($123M), Knit T-shirts ($120M), and Non-Knit Women's Suits ($87.4M). These products are also not directly dependent on Evergrande fallout. Bangladesh does not export any luxurious products to China; therefore, the demand can be expected to remain stable in the near future.

A bailout or a weaker economy will have a devaluing impact on the Chinese currency. In this case, Bangladesh will be slightly benefited because Bangladesh imports more from China than it exports.

Chinese FDI to Bangladesh, which in the most recent period has had an increasing trend[xxxv], is likely to continue because of several other non-Evergrande-related factors like Chinese geo-political tensions with India, existing huge Chinese investment, control over the Asia pacific, belt and road initiative etc.

At last, some experts are predicting that the Evergrande fallout might cause an Asian financial crisis similar to what happened in 1997-98[xxxvi]. In such a turn of events, Bangladesh might be slightly exposed in the foreign currency market. Such types of impacts have historically never gotten so serious for Bangladesh.

References and End-notes

[i]What Is China Evergrande and Why Is It In Trouble?- https://www.washingtonpost.com/business/what-is-china-evergrande-and-why-is-it-in-trouble/2021/09/21/f85ee748-1a93-11ec-bea8-308ea134594f_story.html

[ii] What Is China Evergrande and Why Is It In Trouble?- https://www.washingtonpost.com/business/what-is-china-evergrande-and-why-is-it-in-trouble/2021/09/21/f85ee748-1a93-11ec-bea8-308ea134594f_story.html

[iii] https://www.nytimes.com/2021/09/21/business/china-evergrande-bailout.html

[iv] https://www.wsj.com/amp/articles/evergrande-china-crisis-11632330764

[v] https://www.nytimes.com/2021/09/21/business/china-evergrande-bailout.html

[vi] “Evergrande Gave Workers a Choice: Lend Us Cash or Lose Your Bonus”- https://www.nytimes.com/2021/09/19/business/china-evergrande-debt-protests.html

[vii] https://www.bbc.com/news/business-58579833

[viii] Explained | Chinese real estate firm Evergrande crisis a ‘Lehman moment’? https://www.thehindu.com/business/explained-chinese-real-estate-firm-evergrande-crisis-a-lehman-moment/article36643709.ece

[ix] “What China’s Three Red Lines Mean for Property Firms”- https://www.washingtonpost.com/business/what-chinas-three-red-lines-mean-for-property-firms/2021/06/30/37c2f03a-d987-11eb-8c87-ad6f27918c78_story.html

[x] https://www.nytimes.com/article/evergrande-debt-crisis.html

[xi] https://www.nytimes.com/article/evergrande-debt-crisis.html

[xii] “Empty Homes and Protests: China’s Property Market Strains the World”- https://www.nytimes.com/2018/12/30/business/china-economy-property.html?action=click&module=RelatedLinks&pgtype=Article

[xiii] https://www.nytimes.com/article/evergrande-debt-crisis.html

[xiv] https://www.nytimes.com/2021/09/22/business/economy/china-economy-evergrande.html/

[xv] https://www.nytimes.com/2021/09/22/business/economy/china-economy-evergrande.html/

[xvi]“ Evergrande’s plight brings no joy to the man behind its big short”-?https://www.ft.com/content/298b140e-b46c-41a9-9329-fb633a070dfd

[xvii] “BlueBay, Blackrock, Ashmore and UBS exposed to Evergrande –Morningstar” https://www.reuters.com/business/finance/bluebay-buyer-evergrande-debt-ashmore-ubs-exposed-morningstar-2021-09-27/

[xviii] https://www.firstpost.com/business/global-investors-rattled-as-evergrande-struggles-with-debt-all-you-need-to-know-about-chinas-biggest-builders-troubles-9982711.html

[xix] Evergrande: What would China’s biggest debt restructuring look like?- https://www.ft.com/content/a29e6b20-9d01-43c1-a7d9-77abbacf5e9a

[xx] “In the unlikely event of outright default, China’s banking system has an annual profit of 1.9 trillion yuan and reserves of 5.4 trillion yuan against bad loans, "which could easily absorb the loss," Larry Hu and Xinyu Ji of Macquarie Group said in a report.”- https://www.euronews.com/next/2021/09/21/china-evergrande-could-the-property-giant-s-250-billion-debt-spark-a-global-financial-cris

[xxi] “Here’s why the Evergrande crisis is not China’s ‘Lehman moment’”- https://www.cnbc.com/2021/09/22/heres-why-the-evergrande-crisis-is-not-chinas-lehman-moment.html?recirc=taboolainternal

[xxii] “Wall Street Banks Questioned by Fed On Evergrande Exposure” https://www.bloomberg.com/news/articles/2021-09-28/wall-street-banks-questioned-by-fed-about-evergrande-exposure

[xxiii] “Wall Street Banks Questioned by Fed On Evergrande Exposure” https://www.bloomberg.com/news/articles/2021-09-28/wall-street-banks-questioned-by-fed-about-evergrande-exposure

[xxiv] https://www.wsj.com/articles/chinese-bad-debt-manager-huarong-to-be-bailed-out-by-state-owned-firms-11629353827

[xxv] https://www.ft.com/content/4404ded1-82b0-475f-93cd-c54bba17d085

[xxvi] https://www.ft.com/content/ea1b79bf-cbe3-41d9-91da-0a1ba692309f

[xxvii] “I think one of the key things that people have underestimated is the significant paradigm shift that the government has instigated within the property sector,” said Nish Popat, co-lead portfolio manager for the emerging markets corporate debt team at Neuberger Berman, who also noted the widespread view outside of China that the company was too big to fail. “When we spoke to our Shanghai team,” he says, “they did not believe that that was the case.” https://www.ft.com/content/298b140e-b46c-41a9-9329-fb633a070dfd

[xxviii] “What Is China Evergrande and Why Is It In Trouble?”- https://www.washingtonpost.com/business/what-is-china-evergrande-and-why-is-it-in-trouble/2021/09/21/f85ee748-1a93-11ec-bea8-308ea134594f_story.html

[xxix] “In China, Herd of ‘Gray Rhinos’ Threatens Economy”- https://www.nytimes.com/2017/07/23/business/china-economy-gray-rhinos.html?action=click&module=RelatedLinks&pgtype=Article

[xxx] “Asian investors trod carefully on Wednesday but nerves appeared to be settled by news that troubled Chinese property giant Evergrande had agreed a plan to repay interest on one of its key bonds, for now avoiding a default that many fear could hammer the domestic and global economy”- https://www.thedailystar.net/business/economy/industries/investments/news/asian-investors-soothed-evergrande-bond-plan-2182091

[xxxi] https://www.ft.com/content/595c3f50-755d-4dcc-afc3-4c993e50a936

[xxxii] https://www.ft.com/content/298b140e-b46c-41a9-9329-fb633a070dfd

[xxxiii] “Evergrande fallout could be worse than Lehman for China, warns Jim Chanos” - https://www.ft.com/content/0bf52d39-fd42-408f-aa85-52a4135de312

[xxxiv] https://www.ft.com/content/bbd676b6-68e1-44f3-8e74-15c8e340e3a3

[xxxv]“Foreign direct investment (FDI) from China to Bangladesh has jumped by about 200 per cent year-on-year to $418 million in the past seven months, according to Chinese ambassador Li Jiming.” https://www.thedailystar.net/business/global-economy/news/chinese-fdi-bangladesh-sees-huge-jump-2186406

[xxxvi] Mr. Rosenberg doesn’t believe that Evergrande represents a “Lehman moment” for China – referring to the 2008 collapse of U.S.-based investment bank Lehman Brothers, which was a key trigger of the global financial crisis. But he does see parallels to the Asian crisis of 1997-1998, which burst debt-drenched property bubbles and caused currencies in the region to collapse.- https://www.theglobeandmail.com/business/commentary/article-evergrande-crisis-is-a-global-problem-but-how-big-a-problem-is-hard-to/?ref=premium