China Financial Contagion Fears Come And Go In A Few Days
Published Friday, September 24, 2021 at: 5:53 PM EDT
Fears of a China financial contagion infecting the global economy caused a plunge in the U.S. stock market on Monday, but the Standard & Poor’s 500 stock index recovered and closed with a one-half of 1% weekly gain.
Authorities in Beijing have signaled that Evergrande, one of China’s biggest real estate developers and reportedly the most indebted company in the world, may not be too big to fail. Unless Beijing rescues Evergrande, it is expected to default on its $300 billion in debts. The Chinese government has previously bailed out troubled companies, but it is cracking down on risk – including overleveraged companies; in a separate action Thursday, government authorities banned cryptocurrency transactions.
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