China can ‘contain’ economic, financial risks posed by Evergrande crisis, central bank chief says

People’s Bank of China (PBOC) governor Yi Gang admits the struggles of China Evergrande Group ‘casts a little bit of concern’

Fears about a fast-spreading contagion in the US$5 trillion property sector have sparked a sell off of bonds from Chinese developers

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People's Bank of China (PBOC) governor Yi Gang. Photo: Reuters

Published: 9:07am, 18 Oct 2021Updated: 9:07am, 18 Oct 2021

People’s Bank of China (PBOC) governor Yi Gang said authorities can contain risks posed to the Chinese economy and financial system from the struggles of China Evergrande Group.

The property developer’s trouble “casts a little bit of concern,” Yi said at a virtual meeting of the Group of 30 on Sunday.

“Overall, we can contain the Evergrande risk.”

Concerns have grown that the cash crunch at Evergrande is spilling over to other developers as President Xi Jinping maintains strict measures to cool the property market.

The rights and interests of creditors and shareholders will be fully respected in strict accordance with the law. And also the law has clearly indicated the seniority of those liabilities

Yi Gang

Contagion fears intensified over the past two weeks after a surprise default by Fantasia Holdings Group and a warning from Sinic Holdings Group that its default was imminent.