How China keeps putting off its ‘Lehman moment’

REMEMBER the Evergrande crisis?

It was little more than a year ago that Evergrande Group, the Chinese property developer, was about to collapse under more than US$300 billion in debt. There were warnings of a catastrophic default that would ripple through China’s economy, maybe even set off a global depression. China, it was said, faced its “Lehman moment” – when a corporate failure like that which felled the once-venerable Wall Street investment bank in 2008 finally forces Chinese Communist Party policymakers to reckon with systemic financial weakness.

Not quite. Evergrande is not out of the woods, but a catastrophic implosion has been avoided after the Chinese government stepped in to help arrange a restructuring of much of its debt. Well before a new threat to the global financial order emerged this month – the collapse of Silicon Valley Bank in the United States – Evergrande had largely fallen out of the headlines.