Evergrande. Remember the name. Because it may just be forming the dark nucleus of an economic singulatory in China that will suck Australia across an income shock event horizon.
Throughout 2021, I’ve been tracking the evolution of a new policy regime for Chinese mega-developers called the “three red-lines”. It aims to deleverage one of China’s wildest and most indebted economic sectors to help slow over-building and encourage economic restructuring towards more productive uses of capital.
Evergrande is China’s largest and most indebted developer. It has so far completely failed to meet the new constraints of the “three red-lines” policy.
