NEW YORK (Reuters). China is able to resolve the problems related to China Evergrande Group’s debt, but there is a chance that property developers’ pain could lead to greater financial stress. The IMF released a report Tuesday and commented on Tuesday.

Evergrande’s liabilities exceed $300 billion. Investors worldwide are now concerned about Evergrande. Evergrande missed three rounds of bond payments. Market fears have intensified over the possibility of contagion among other property developers. Bond markets took heavy criticism Tuesday for debt-stricken Chinese firms.

Tobias Adrian from the IMF’s Monetary and Capital Markets Department said that “I believe authorities have the ability to resolve the situation.” This interview was conducted in conjunction with Tuesday’s publication of the IMF’s Global Financial Stability Report. They have the financial capacity, and the legal and institution tools necessary to deal with this problem. Communication is poor and necessary actions aren’t being taken.

Adrian claimed that contagion has been contained at this time.

According to IMF’s reports, the spread of contagion was limited to less-skilled property developers and smaller firms. The risk of financial distress escalating is real if the situation becomes more severe. This could have serious consequences for the Chinese economy, financial sector, and global capital markets.

Beijing has made it clear that state-backed developers of property and government-owned businesses have been urged by Beijing to acquire Evergrande’s assets. This was according to people familiar with the matter.

Adrian stated, “As long the authorities have a plan I believe that everything will be resolved.”

Global Financial Stability Report by the IMF urged policymakers more broadly to act decisively and to target economic assistance tailored to the needs of their country.