By Leika Kihara

TOKYO (Reuters) – China has sufficient buffers and policy tools to prevent debt-riddled developer China Evergrande Group from triggering a global financial crisis, Asian Development Bank President Masatsugu Asakawa said on Tuesday.

Asakawa indicated that Evergrande’s woes highlight the importance of asset-price inflation for China’s quick growth. There could also be implications for local government finances and consumption.

Asakawa said that “I don’t think one company’s episode will trigger a global crises like the one that led to Lehman Brothers’ collapse.”

According to Asakawa, Chinese authorities are ready to deal with any possible spillover from Evergrande’s eventual collapse. The central bank is also pumping plenty of short-term liquidity in markets.

He added that Evergrande was able to sell enough of its assets in order to pay the debt.

These woes highlighted the Chinese economy’s dependence on the hot property market, which resembled Japan’s asset-inflation boom in the 1980s and early 1990s.

China’s region governments could suffer from a crash in the property market, which would also affect households and those who have used real estate assets to fund their debt.

Asakawa was Japan’s former top currency diplomat.

Evergrande, which has $305 billion in liabilities, has raised concerns that its problems may spread to China’s financial system. However the damage so far has been limited to the property sector.

Asakawa stated that China would likely resume moderate growth in 2022, despite structural issues such as increasing private-and public sector debt.

China’s long-term growth trend will be moderate from now onwards, Asakawa said. “It won’t go back to the high-growth period of 7%-8% expansion,” he stated.