After Evergrande Group, a leading real estate developer, announced that it may be unable to meet a bond payment of US$260 million, China Securities Regulatory Commission said the spillover risk of Chinese developer’s problems into the wider capital market will be controllable, and it will continue to safeguard the financing functioning of the market, support reasonable financing of real estate developers, and promote a steady development of the capital market and the real estate sector. The Evergrande default is largely due to mismanagement and reckless expansion in diverse directions. Experts argued that the risks caused by a particular real-estate enterprise in the short term are unlikely to undermine the fund-raising function of the market in the medium and long term, and the risk of contagion from China’s real estate difficulties for the entire financial system will be limited.
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