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IMF says China has tools to avoid Evergrande’s problems becoming systemic crisis By Reuters

by Mike Robinson

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© Reuters. FILEPHOTO: Man walks past unfinished housing buildings of Evergrande Oasis. This complex was built by Evergrande Group in Luoyang on September 15, 2021. REUTERS/Carlos Garcia Rawlins

WASHINGTON (Reuters) – The International Monetary Fund on Tuesday said it is closely following developments surrounding China Evergrande Group, but believes Beijing has the tools to prevent the situation from turning into a systemic crisis.

Gita Gopinath, chief economist at the IMF, said to Reuters that China Evergrande Group’s real estate sector is a major part of China’s economy. This could impact China’s financial stability and economic activity.

Gopinath indicated that “we are closely monitoring the developments in China,” and stressed the need to reform the regulatory system to deal with the high-leverage property sector. We believe China still has the resources and policy room to stop this becoming a major crisis.

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