Beijing may initiate a managed debt restructuring of a troubled property developer in the coming week, followed by policy easing in October to contain spillover to the broader economy, according to Morgan Stanley economists.
Regulators have had a mechanism to deal with defaults of property developers and reduce systemic risk, economists including Robin Xing wrote in a note Tuesday. If these actions are delayed, there could be a one percentage point impact on Chinas gross domestic product growth in the fourth quarter, warranting bigger stimulus in 2022, they added.
Others including Citigroup Inc. are expecting Beijing to help out China Evergrande Group, the worlds most indebted developer, as it missed interest payments due Monday …
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