What has Biden said about the Evergrande crisis?
The Chinese real estate developer is in serious financial trouble and its death throes come at the same time as a big meeting of US allies in Asia.
What has happened to Evergrande?
Chinese real estate giant Evergrande is thought to be on the brink of collapse as it struggles to make interest payments worth around $84 million on offshore bonds this week. In total, it has debts of more than $300 billion.
Chinese construction company Evergrande likely to default on its $300bn debt.— ian bremmer (@ianbremmer) September 21, 2021
If it does, it’ll be one of the largest in history.
Argentina’s 2001 foreign debt default $93bn
Greece’s 2012 restructuring $200bn
Lehman Brothers when it filed for bankruptcy $600bn
Global stock markets have been watching closely as the world’s most indebted real estate developer faces a key test in its ongoing viability after appearing to lose vital support from the Chinese government. Due to its lack of cash, it has been paying off investors in property. A wholesale collapse is not expected, but can't be ruled at either. Many companies will be circling the corpse of Evergrande.
What could end up being a large knock to the Chinese economy also plays into the hands of the countries which want to prevent a growing Chinese influence in Asia and the Pacific.
What is "the Quad?"
"The Quad" is an informal meeting of the Quadrilateral Security Dialogue. This is a meeting between the US, Australia, Japan and India and, although it wouldn't be publicly admitted, is a counter to the influence of China. The meeting will supposedly be to "promote a free and open Indo-Pacific", according to a White House press release. Biden himself has not commented on the meeting nor the Evergrande crisis.
Mooted in 2007, it wasn't until the Trump Presidency that the meeting began to take some weight. This has become more so since the recent singing of the AUKUS agreement, in which the UK and US will provide Australia with the technology to build nuclear-powered submarines.
Japan has taken a harder stance against China in recent years. In a blunt interview with CNN in September, Japanese Defense Minister Nobuo Kishi said Japan would "resolutely defend" its territory in the East China Sea "against Chinese action."
China and India have long been vying for control of the Himalayan mountains and the countries share numerous border disputes dating back to the British control of India. Any agreements to isolate the Chinese are welcome by Narenda Modi's Indian nationalist government. Although not in open war, Indian and Chinese soldiers have fought in recent years on said border, including a denied incident of a hand-to-hand melee in which 20 Indian soldiers were killed atop a mountain.
What is the Chinese reaction?
Beijing has said the AUKUS deal is an example of how Washington is only focused on military power in Asia. In comparison, China this week formally requested to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), an 11-country free trade pact. The US was once a part of it but pulled out during the Trump administration.
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