China Credit Contagion Risk Is Phantom, Structural Challenges Are Real

Dire news from two iconic Chinese property developers, Country Garden Holdings (2007.HK) and China Evergrande Group (3333.HK), hit the press this month. Country Garden missed a scheduled bond payment, its bonds stopped trading and it was de-listed from the Hang Seng Index. Evergrande declared bankruptcy seeking Chapter 15 protection on USD 31.7BN of obligations to keep its creditor restructuring plans on track.

Is this China’s Lehman Moment? The answer may depend on what Lehman means to you. Bob Ivry, now Forbes Executive Editor for enterprise, snagged this quote from me in 2011—