Beijing showed on Friday how well-oiled China’s strategy is to launch an ordeal at the main outbreaks beyond its control. And the elements that escape the designs of the Chinese Communist Party are two: excesses and unofficial openness. The faithful to the magazine Inversión read, at the end of August, the details that a month later are confirmed.
The most reliable sources on the Evergrande and bitcoin case, convened by finanzas.com to their new market-closing podcasts, they match. The parsimony of Xi Jinping before the fall of one of the largest groups in the country has to do “with cleaning the house”; but prohibiting operations with crypto assets “is pure repression.”
The managing partner of Nextep Finance, Víctor Alvargonzález, reports that two threats loom over cryptocurrencies. “The first is the desire of the authorities – Chinese or not – to regulate them since they are a brutal fiscal hole.”
“The second, which runs parallel to the first, is explained by what is produced in China: the old-school Communist Party prevails over the administrative and more open-minded branch.”
So this internal discussion contextualizes Beijing’s recent moves against Alibaba, the bulk of tech and crypto assets. “They don’t want anything to get out of control.”
The data provided a notarized record of the global impact of disputes between Chinese political factions.
Evergrande: cleaning the house
Years ago overstimuli from the Chinese economy fuel controversy over Evergrande. “Ghost cities are not new, they come from the past,” recalled Andbank fund manager Gonzalo Lardiés.
The post-pandemic stimuli to recover the economy accentuated the imbalances, which arose years ago.
Evergrande, more than Lehman Brothers, is reminiscent of Spanish savings banks. “Within not doing things with the expected rigor, when the wind direction changes a little, and everything is not so favorable, whoever is in the weakest position is the first to raise their hand.”
“Evergrande can be something similar.”
The sources consulted by finanzas.com They anticipate that the solution will be similar to that of the Spanish Banco Popular: bondholders and shareholders will pay. Then – most likely – is that the group, which is not only real estate, ends up chopped up.
Beijing will protect apartment buyers, who will receive their homes. But he will not move a single finger in favor of the giant.
Evergrande: risk of contagion
The analyst of the Investment magazine Josep Codina does not foresee contagion, even if Evergrande falls or falls apart. “The exposure of Western banks is 500 million,” he says.
The problem would come if “there were more sources of destabilization of the Chinese economy, which for now are not appreciated.”
And it is precisely predictability that makes the difference between Evergrande and Lehman Brothers.
“Would it surprise you if Evergrande went bankrupt?” Asks Sidiclear Sicav president Luis García Langa rhetorically. “The global real estate market is growing in a structured way; therefore, the context is different from 2008 ”.
The risk of it damaging the Chinese banking system seems unlikely according to the consensus of finanzas.com
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