China’s ‘Volcker moment’ The country’s developers, sitting on $5.1 trillion debt, could derail the world economy

 “This time is different. It is China’s Volcker moment,” says Ting. The term refers to the drastic monetary tightening of the US Federal Reserve under Paul Volcker, who raised interest rates to 19pc in 1981 to halt the destructive wage-price spiral of the Great Inflation – setting off the Latin American debt crisis as collateral damage.

The authorities are already orchestrating a disguised soft-landing for indebted developer Evergrande. “They cannot afford to let it go bust so they are kicking the can down the road,” said George Magnus from Oxford University’s China Centre.

Ambrose Evans-Pritchard Telegraph 1 September 2021

https://www.telegraph.co.uk/business/2021/09/01/chinas-volcker-moment-mounting-risk-global-recovery/

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