The ongoing crisis surrounding debt-ridden Chinese developer Evergrande has captured global investor attention for much of this week.
's situation is not a surprise, given the steps taken by Beijing to reign in excessive debt in the property sector, according to Orient Capital Research's Andrew Collier.
"The end result is one of the largest companies and the most indebted is not surprisingly, in trouble," he said, referring to Evergrande. The Chinese authorities' rationale for such an action is "pretty obvious," he explained. "They figure that if they don't do this, then they're going to have an even bigger crisis on their hands and the entire property market goes into a bubble territory more than it is, and then collapses."
Still, he sees authorities as "likely to inflict some pain" on investors to send a clear message that they're tired of excess in the property sector.Collier said there were two reasons why global markets are worried about Evergrande's troubles.
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