The risks that Asia faces from a tottering China Evergrande

The Asian financial crisis started with the collapse of a South Korean steel maker. We need to ensure that something similar does not happen with the world's most indebted real estate company.

The China Evergrande Centre (middle) in Hong Kong. The thing to worry about, perhaps, is not a single big crisis, or maybe two, but a triple whammy around a big corporate collapse, slowing growth and rising interest rates, says the writer. PHOTO: AGENCE FRANCE-PRESSE

The authorities in China have moved again to stanch the continuous flow of bad news from China Evergrande, the world's most indebted real estate company. Late Thursday night brought news that China's Financial Stability and Development Committee had approved plans for the company to renegotiate some of its loans with banks and creditors.

Although China Evergrande Group's Hong Kong listed shares ticked up a notch on the news and closed nearly 2 per cent up for the day at Friday's close, no one is in any doubt that this is only a temporary balm. Days earlier, Moody's had downgraded the company for the third time in as many months, citing "weak recovery prospects" for creditors should the firm default.

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