The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Evergrande: A bond default is the least of China’s problems

Global investors want to know if troubled Chinese developer Evergrande can meet its bond repayments – but far bigger risks exist, from local government bond defaults to badly run banks exposed to overleveraged developers.

Photo: Reuters

The eyes of many global investors are now on Evergrande’s bonds.

And for good reason. On Wednesday, Evergrande said it resolved interest payments on an onshore bond due this week. The following day, it was scheduled to make an $83.5 million repayment on a $2 billion offshore bond. Another $47.5 million is due next week.

Financial regulators in Beijing told management to avoid a near-term default on its dollar bonds, to prevent contagion spreading through the economy and offshore.

But let’s look ahead, to events likely to lead the news tomorrow, next month and beyond. For even if Evergrande’s financial plight can quickly be resolved – and it cannot – multiple spillover risks present themselves.

Not all are destined to happen, but some surely will, so it is worth running the rule over them now.

Three red lines

Let’s start with China’s property sector, an industry described by Andrew Collier, China country analyst at research firm GlobalSource Partners, as a long-term “huge piggy bank for the economy”.

For years, regulators looked the other way as onshore developers loaded up on debt and invested in sectors far beyond their remit.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree