The faltering Chinese real estate giant China Evergrande Group does not pose a major threat to the financial system,


news agency

reported on

Friday, based on a press conference by the Chinese central bank.

It is the first time that a Chinese government body has made a statement about the situation.

The central bank calls the risk of Evergrande's collapse "manageable", with little chance of contagion to the financial system.

The real estate group has long dominated the news, due to a sky-high debt of around 250 billion euros and changing rules in China.

This causes the company to falter, with potentially major consequences for the rest of the system.

Evergrande owes 171 Chinese banks and 121 other financial companies money.

If it collapsed, it could pull banks with it.

The Chinese central bank stated on Friday that the risk of contagion is small and calls these risks "manageable".

Zou Lan, the head of the Financial Markets department at the central bank, did throw a sneer at Evergrande.

"The company has failed to get its act together in recent years and act sensibly in this changing market."

See also: Can a Chinese real estate giant plunge the global economy into another crisis?

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