By consensus, Evergrande does not represent a Lehman-style moment for China.
Markets are braced, but the real threat to the economy lies in the clampdown on emissions, causing raw material and component shortages. Tin, aluminium, magnesium, and silicon are cases in point.
Policymakers in China are adept, and may yet intervene in property and financial markets, if necessary, to ensure a controlled landing.
September is a notoriously difficult month for stocks. The short-term risks are firmly to the downside, including for US equities.
But there are bigger risks than Evergrande.
Summary
- Tackling climate change may be a bigger priority
- Deleveraging necessary, but will be managed
- Combatting inequality will be a bigger challenge
