China central bank says Evergrande risks 'controllable'

accreditation
0:00
play article
Subscribers can listen to this article
Financial stock exchange market display screen board on the street
Financial stock exchange market display screen board on the street

China's central bank said Friday that the risk of spillover from embattled property giant Evergrande to the financial sector was "controllable", breaking its silence on the company's debt troubles, state media reported.

Local authorities are "carrying out risk disposal and resolution work in accordance with the principles of rule of law and marketisation," People's Bank of China official Zou Lan said at a briefing, according to an outlet of the Xinhua state news agency.

Zou's comments came amid growing concern that the cash crunch at Evergrande - which is struggling with more than $300 billion in liabilities - could lead to contagion for the wider Chinese economy.

The liquidity crisis came as the country's real estate sector found itself under tightened scrutiny as well, with regulators announcing caps for three different debt ratios in a scheme dubbed "three red lines" last year.

"In recent years, the company has been poorly managed, and was unable to operate cautiously in accordance with changes in the market situation," Zou said on Friday.

"Instead, it blindly diversified and expanded, causing the serious deterioration of operating and financial indicators, and eventually an explosion of risk," he added.


We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
16.10
-1.0%
Rand - Pound
21.32
+0.2%
Rand - Euro
18.21
+0.3%
Rand - Aus dollar
11.28
+0.2%
Rand - Yen
0.14
+0.3%
Gold
1,783.48
0.0%
Silver
22.55
0.0%
Palladium
1,816.00
0.0%
Platinum
936.31
0.0%
Brent Crude
69.88
+0.3%
Top 40
64,307
-0.4%
All Share
70,808
-0.3%
Resource 10
66,503
-1.6%
Industrial 25
93,791
+0.1%
Financial 15
13,982
+0.7%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot