Botswana is set to emerge this week from an 18-month state of emergency that will remove the president’s emergency powers and end pandemic restrictions on trade and gatherings. While many shops, bars, and restaurants want to get back to normal, some in Botswana’s alcohol industry say it’s too soon to lift restrictions on night spots.

The minister of trade and industry, Kgafela Mmusi, says the end of the edict, set for this Thursday, means businesses can revert to normal trading hours. This includes the reopening of nightspots. 

That should be welcome news to Botswana’s alcohol industry, which employs around 50,000 people, including those who work at bars, breweries and distributors. 

But Botswana Beverages Association president Peter Noke warns some establishments might not be ready to reopen. 

Those that do will likely have restrictions, including a ban on dancing.

He said they have requested that dance floors be converted into seating areas.

“There should be sufficient spacing between the tables and there will be no dancing,” he said. “If one wishes to dance, they can only do so while seated.”

Music promoter Zain Aftermath says the decision to eliminate the dance floor is ill-advised. 

“How are you going to open clubs and then say people should not dance? It doesn’t make sense. I wouldn’t leave my house to go to a nightclub, pay and buy alcohol so that I can sit on a chair. It is going to affect attendance in a huge way,” he said.

Workers’ union leader Johannes Tshukudu welcomes the reopening as entertainment industry workers have been mostly out of work since March of last year. But he too, urges caution. 

“We don’t expect full capacity at the beginning, we may decide to have half capacity at the venues so that at least so that we use that as an observation element. We don’t want to see this thing [opening of night clubs] as a trap by the government to justify reintroducing the state of emergency,” he said.

Minister Kgafela says the government will keep an eye on nightspots to ensure compliance with the rules. 
…

Thousands of farmers in India blocked highways and rail tracks on Monday to give renewed momentum to their months-long demand for scrapping agricultural laws that have triggered the country’s longest farm protest and presented a political challenge to Prime Minister Narendra Modi. 

The nationwide protest, or “bharat bandh,” was held on the first anniversary of the passage of the laws that the government says will modernize the agricultural sector, but which farmers fear will spell an existential threat to their livelihoods.

The legislation allows farmers to do business outside government-run wholesale markets where they have sold their crops for decades at guaranteed prices.

But farmers fear that opening up sales of farm produce to the corporate sector will end an era of assured prices for crops like rice and wheat. They say farmers in states such as Bihar where the system has been scrapped are already in distress and get a lower price for their crop. 

Defiant farmers have camped on highways on the outskirts of New Delhi since November amid the persisting stalemate — the government has often said it is open to a dialogue but will not repeal the laws.

On Monday, thousands of farmers waving flags converged outside key roads leading to the Indian capital choking traffic. A farmer from Haryana, Sunil Kumar, who was among the protestors, said the stir demonstrated the farmers’ determination to continue their struggle has not ended.

Life was also disrupted in the northern states of Punjab and Haryana, lush rice and wheat growing states, that have been at the forefront of the protest.

The farmers stir also reverberated in the south of the country — they held protests in the southern cities of Chennai and Bengaluru and Kerala state. In some places they squatted on rail tracks.

Ahead of Monday’s protest, Rakesh Tikait, one of the farm leaders spearheading the stir, said that they are ready to protest for ten years, but will not allow the “black legislation” to be passed.

Several opposition parties including the Congress Party have supported the farmers’ demands. In a tweet, senior leader Rahul Gandhi called the government “exploitative” and extended support to farmers using hashtag #Istandwithfarmers. 

The government maintains the laws will improve farm incomes and agricultural productivity. Prime Minister Narendra Modi called them a “watershed moment” for Indian agriculture when they were passed last year.

India’s agriculture has not kept pace with its economy shrinking to just 15% of gross domestic product over the decades. But nearly two thirds of the country, or some 800 million people, depend on agriculture for their livelihood as the country has not been able to generate enough non-farm-based jobs. 

“The protest is a reflection of the compound anger they carry at the neglect of agriculture, especially farmers’ incomes which have become so low over the decades,” says agriculture economist Devinder Sharma. “The government believes that facilitating corporate entry would pull agriculture out of the crisis but that will not help because a majority of the farmers are small.”

The bulk of Indian farmers own plots of less than one hectare and fear that the laws will make them vulnerable to corporates that will drive down prices and force them to sell their land.

With the stalemate showing no signs of a resolution, the political impact of the farmers stir will be tested early next year when elections in India’s most populous state, Uttar Pradesh, are held.

Farmers from the state that adjoins New Delhi are among those who have been at the forefront of the ten-month old agitation. They held a mammoth rally earlier this month and say they will step up protests across the state ahead of the polls to show that the government is pursuing what they call anti-farmer policies. 
…

Up to 90% of British fuel stations ran dry across major English cities on Monday after panic buying deepened a supply chain crisis triggered by a shortage of truckers that retailers are warning could batter the world’s fifth-largest economy. 

A dire post-Brexit shortage of truck drivers emerging after the COVID-19 pandemic has sown chaos through British supply chains in everything from food to fuel, raising the specter of disruptions and price rises in the run up to Christmas. 

Just days after Prime Minister Boris Johnson’s government spent millions of pounds to avert a food shortage due to a spike in prices for natural gas, the biggest cost in fertilizer production, ministers asked people to refrain from panic buying. 

But lines of dozens of cars snaked back from gasoline stations across the country on Sunday, swallowing up supplies and forcing many gas stations to simply close. Pumps across British cities were either closed or had signs saying fuel was unavailable on Monday, Reuters reporters said. 

The Petrol Retailers Association (PRA), which represents independent fuel retailers which now account for 65% of all UK forecourts, said members had reported that 50% to 90% of pumps were dry in some areas. 

“We are unfortunately seeing panic buying of fuel in many areas of the country,” Gordon Balmer, executive director of the PRA, who worked for BP for 30 years, told Reuters. 

“We need some calm,” Balmer said. “Please don’t panic buy: if people drain the network then it becomes a self-fulfilling prophecy.” 

Britain is considering calling in the army to ensure fuel supplies reach consumers, according to The Times and Financial Times. 

Environment Secretary George Eustice said there was no shortage of fuel and urged people to refrain from panic buying. 

Haulers, gas stations and retailers warned that there were no quick fixes, however, as the shortfall of truck drivers – estimated to be around 100,000 – was so acute, and because transporting fuel demands additional training and licensing. 

Supply chain crunch 

Britain’s retail industry warned the government on Friday that unless it moves to alleviate an acute shortage of truckers in the next 10 days significant disruption was inevitable in the run-up to Christmas.

For months, supermarkets, processors and farmers have warned that a shortage of heavy goods vehicle (HGV) drivers was straining supply chains to breaking point – making it harder to get goods onto shelves.

Aldi UK CEO Giles Hurley said that while his discount supermarket chain was in a good position, nobody could guarantee there would not be inflation in the market around Christmas. 

BP said on Sunday that nearly a third of its British petrol stations had run out of the two main grades of fuel as panic buying forced the government to suspend competition laws and allow firms to work together to ease shortages. 

Business Secretary Kwasi Kwarteng said the suspension would allow firms to share information and coordinate their response. 

“This step will allow government to work constructively with fuel producers, suppliers, haulers and retailers to ensure that disruption is minimized as far as possible,” the business department said in a statement. 

The government on Sunday announced a plan to issue temporary visas for 5,000 foreign truck drivers. Around 25,000 truckers returned to Europe before Brexit and Britain was unable to test 40,000 drivers during COVID-19 lockdowns.
…

Democrats pushed a $3.5 trillion, 10-year bill strengthening social safety net and climate programs through the House Budget Committee on Saturday, but one Democrat opposed the measure in an illustration of the challenges party leaders face in winning the near unanimity they’ll need to carry the sprawling package through Congress. 

The Democratic-dominated panel, meeting virtually, approved the measure on a near party-line vote, 20-17. Passage marked a necessary but minor step for Democrats by edging the bill closer to debate by the full House. Under budget rules, the committee wasn’t allowed to significantly amend the 2,465-page measure, the product of 13 other House committees. 

The more important work has been happening in an opaque procession of mostly unannounced phone calls, meetings and other bargaining sessions among party leaders and rank-and-file lawmakers. President Joe Biden, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Chuck Schumer, D-N.Y., have led a behind-the-scenes hunt for compromises to resolve internal divisions and, they hope, allow approval of the mammoth bill soon. 

Pelosi told fellow Democrats in a letter Saturday that they must pass the social and environment bill this week, along with a separate infrastructure bill and a third measure preventing a government shutdown on Friday. 

“The next few days will be a time of intensity,” she wrote.

Political vulnerability

Moderate Rep. Scott Peters, D-Calif., joined all 16 Republicans on the Budget Committee in opposing the legislation. His objections included one that troubles many Democrats: a reluctance to support a bill with provisions that would later be dropped by the Senate.

Many Democrats don’t want to become politically vulnerable by backing language that might be controversial back home, only to see it not become law. That preference for voting only on a social and environment bill that’s already a House-Senate compromise could complicate Pelosi’s effort for a House vote this week. 

Peters was among three Democrats who earlier this month voted against a plan favored by most in his party to lower pharmaceutical costs by letting Medicare negotiate for the prescription drugs it buys.

Party leaders have tried for weeks to resolve differences among Democrats over the package’s final price tag, which seems sure to shrink. There are also disputes over which initiatives should be reshaped, among them expanded Medicare, tax breaks for children and health care, a push toward cleaner energy, and higher levies on the rich and corporations. 

Democrats’ wafer-thin majorities in the House and Senate mean compromise is mandatory. Before the measure the Budget panel approved Saturday even reaches the House floor, it is expected to be changed to reflect whatever House-Senate accords have been reached, and additional revisions are likely. 

‘Decades of disinvestment’

The overall bill embodies the crux of Biden’s top domestic goals. Budget panel Chairman John Yarmuth, D-Ky., cited “decades of disinvestment” on needs like health care, education, child care and the environment as the rationale for the legislation. 

“The futures of millions of Americans and their families are at stake. We can no longer afford the costs of neglect and inaction. The time to act is now,” Yarmuth said. 

Republicans say the proposal is unneeded, unaffordable amid accumulated federal debt exceeding $28 trillion and reflects Democrats’ drive to insert government into people’s lives. Its tax boosts will cost jobs and include credits for buying electric vehicles, purchases often made by people with comfortable incomes, they said. 

“This bill is a disaster for working-class families,” said Rep. Jason Smith of Missouri, the committee’s top Republican. “It’s a big giveaway to the wealthy, it’s a laundry list of agenda items pulled right out of the Bernie Sanders socialist playbook.”

The unusual weekend session occurred as top Democrats amp up efforts to end increasingly bitter disputes between the party’s centrist and progressive wings that threaten to undermine Biden’s agenda.

 A collapse of the measure at his own party’s hands would be a wounding preview to the coming election year, in which House and Senate control are at stake.

Infrastructure bill

To nail down moderates’ support for an earlier budget blueprint, Pelosi promised to begin House consideration by Monday of another pillar of Biden’s domestic plans: a $1 trillion collection of roadway and other infrastructure projects. Pelosi reaffirmed this week that the infrastructure debate would begin Monday.

But many moderates who consider the infrastructure bill their top goal also want to cut the $3.5 trillion social and environment package and trim or reshape some of its programs. Sens. Joe Manchin, D-W.Va., and Kyrsten Sinema, D-Ariz., have been among the most visible centrists demanding a smaller price tag. 

In response, progressives — their top priority is the $3.5 trillion measure — are threatening to vote against the infrastructure bill if it comes up for a vote first. Their opposition seems likely to be enough to scuttle it, and Pelosi hasn’t definitively said when a vote on final passage of the infrastructure measure will occur.

With each portion of the party threatening to upend the other’s most cherished goal — a political disaster in the making for Democrats — top Democrats are using the moment to accelerate talks on the massive social and climate legislation. Compromise is a requirement, because the party can lose no votes in the Senate and a maximum of three in the House to succeed in the narrowly split Congress.
…

China Evergrande inched closer on Friday to the potential default that investors fear as an interest deadline expired without any announcement from the property giant whose mountain of debt has spooked world markets.

The company owes $305 billion, has run short of cash and investors are worried a collapse could pose systemic risks to China’s financial system and reverberate around the world.

A deadline for paying $83.5 million in bond interest passed without remark from Evergrande or any sign of bondholders being paid. The firm is now in uncharted waters and enters a 30-day grace period. It will default if that passes without payment.

“These are periods of eerie silence as no-one wants to take massive risks at this stage,” said Howe Chung Wan, head of Asia fixed income at Principal Global Investors in Singapore.

“There’s no precedent to this at the size of Evergrande … we have to see in the next 10 days or so, before China goes into holiday, how this is going to play out.”

China’s central bank again injected cash into the banking system on Friday, seen as a signal of support for markets. But authorities have been silent on Evergrande’s predicament and China’s state media has offered no clues on a rescue package.

Evergrande appointed financial advisers and warned of default last week, and world markets fell heavily on Monday amid fears of contagion, though they have since stabilized.

The conundrum for policymakers is how fiercely they can impose financial discipline without fueling social unrest, since an ugly collapse at Evergrande could crush a property market which accounts for 40% of Chinese household wealth.

Protests by disgruntled suppliers, home buyers and investors last week illustrated discontent that could spiral in the event a default sparks crises at other developers.

Evergrande has promised to prioritize such investors and resolved one coupon payment on a domestic bond this week. But it has said nothing about the offshore interest payment that was due on Thursday or a $47.5 million payment due next week.

Bondholders are starting to think it might be a month or so before things become clearer and markets have already assumed they will take a large haircut.

“Current market pricing estimates that investors in Evergrande’s dollar bonds are likely to recover very little,” said Jennifer James, a portfolio manager and lead emerging markets analyst at Janus Henderson Investors.

“The likeliest outcome is that the company will engage with creditors to come up with a restructuring agreement,” she said, warning that if such a deal is mismanaged “the loss of confidence could have contagion effects.”

Play for time

Global markets have begun to recover after Evergrande’s plight sparked a sharp selloff, trading on the basis that the crisis can be contained.

Only some $20 billion of Evergrande’s debts are owed offshore. Yet the risks at home are considerable because of the risks to China’s property sector, a vast store of wealth.

“Housing sales and investments could inevitably slow further – this would knock nearly 1 percentage point off GDP growth,” analysts at Societe Generale said in a note.

“The longer policymakers wait before acting, the higher the hard-landing risk.”

So far there have been few signs of official intervention.

The People’s Bank of China’s $42 billion cash injection this week is the largest weekly sum since January and has helped put a floor under stocks.

Bloomberg Law also reported that regulators had asked Evergrande to avoid a near-term default, citing unnamed people familiar with the matter.

However The Wall Street Journal said, citing unnamed officials, that authorities had asked local governments to prepare for Evergrande’s downfall.

“Given the deliberate pace of Chinese policy making, the authorities may well choose to play for time,” said Wei-Liang Chang, a macro strategist at DBS Bank in Singapore.

He said they could extend liquidity assistance through the grace period on Evergrande’s coupon payments, given it had no dollar bond maturities looming until March 2022.

Evergrande’s shares handed back some Thursday gains on Friday and fell 6%, while stock of its electric-vehicle unit dropped 18% to a four-year low. Its bonds fell slightly on Friday and its offshore bonds with imminent payments due last traded around 30 cents on the dollar. 

 
…

Japan’s widening wealth gap has emerged as a key issue in a ruling party leadership contest that will decide who becomes the next prime minister, with candidates forced to reassess the legacy of former premier Shinzo Abe’s “Abenomics” policies.

Under Abenomics, a mix of expansionary fiscal and monetary policies and a growth strategy deployed by Abe in 2013, share prices and corporate profits boomed, but a government survey published earlier this year showed households hardly benefited.

Mindful of the flaws of Abenomics, frontrunners in the Liberal Democratic Party’s leadership race –- vaccination minister Taro Kono and former foreign minister Fumio Kishida — have pledged to focus more on boosting household wealth.

“What’s important is to deliver the benefits of economic growth to a wider population,” Kishida said Thursday. “We must create a virtual cycle of growth and distribution.”

But the candidates are thin on details over how to do this with Japan’s economic policy tool-kit depleted by years of massive monetary and fiscal stimulus.

Kono calls for rewarding companies that boost wages with a cut in corporate tax, while Kishida wants to expand Japan’s middle class with targeted payouts to low-income households.

The winner of the LDP leadership vote on Sept. 29 is assured of becoming Japan’s next prime minister because of the party’s parliamentary majority. Two women – Sanae Takaichi, 60, a former internal affairs minister, and Seiko Noda, 61, a former minister for gender equality – are the other candidates in a four-way race.

Parliament is expected to convene on Oct. 4 to vote in a successor to Prime Minister Yoshihide Suga, who announced his decision to quit less than a year after taking over from Abe.

A government survey, conducted once every five years and released in February, has drawn increasing attention to trends in inequality during Abe’s time.

Shigeto Nagai, head of Japan economics at Oxford Economics, said the survey revealed “the stark failure of Abenomics to boost household wealth through asset price growth.”

Average wealth among households fell by 3.5% from 2014 to 2019 with only the top 10% wealthiest enjoying an increase, according to survey conducted once every five years.

Japanese households’ traditional aversion to risk meant they did not benefit from the stock market rally, with the balance of their financial assets down 8.1% in the five years from 2014, the survey showed.

“We think the new premier will need to consider the failures of Abenomics and recognize the myth that reflation policies relying on aggressive monetary easing will not solve all Japan’s problems without tackling endemic structural issues,” Nagai said.

Bank of Japan Governor Haruhiko Kuroda defended Abenomics and said the pandemic, not slow wage growth, was mainly to blame for sluggish consumption.

“Unlike in the United States and Europe, Japanese firms protected jobs even when the pandemic hit,” Kuroda said when asked why the trickle-down to households has been weak.

“Wage growth has been fairly modest, but that’s not the main reason consumption is weak,” he told a briefing Wednesday.

“As the pandemic subsides, consumption will likely strengthen.” 

 
…

First-time claims for U.S. unemployment compensation unexpectedly increased again last week but remained near the low point during the 18-month coronavirus pandemic, the Labor Department reported Thursday.

A total of 351,000 jobless workers filed for assistance, up 16,000 from the revised figure of the week before, the second straight week the figure moved higher. The increase was at odds with projections of economists, who had predicted a declining number.

Still, the claims figures for the last month have been on the whole the lowest since the pandemic swept through the U.S. in March 2020, although they remain above the 218,000 average in 2019.

The jobless claims total has fallen steadily but unevenly since topping 900,000 in early January. Filings for unemployment compensation have often been seen as a current reading of the country’s economic health, but other statistics also are relevant barometers.

Even as the U.S. said last month that its world-leading economy grew at an annualized rate of 6.6% in the April-to-June period, it added only a disappointing 235,000 more jobs in August, a figure economists said was partly reflective of the surging Delta variant of the coronavirus inhibiting job growth.

The number of new jobs was down sharply from the more than 2 million combined figure added in June and July. The unemployment rate dipped to 5.2%, which is still nearly two percentage points higher than before the pandemic started in March 2020.

About 8.7 million workers remain unemployed in the U.S. There are nearly 11 million available jobs in the country, but the skills of the available workers often do not match what employers want, or the job openings are not where the unemployed live.

The size of the U.S. economy – nearly $23 trillion – now exceeds its pre-pandemic level as it recovers faster than many economists had predicted during the worst of the business closings more than a year ago.

Policy makers at the Federal Reserve, the country’s central bank, on Wednesday signaled that in November it could start reversing its pandemic stimulus programs and next year could begin to increase its benchmark interest rate.

How fast the U.S. economy will continue to grow is unclear.

For months, the national government had sent an extra $300 a week in unemployment compensation, on top of often less generous state aid, to jobless workers. But that extra assistance ended earlier this month, with about 7.5 million jobless workers affected by the cutoff in extra funding.

The delta variant of the coronavirus also poses a new threat to the economy.  

Political disputes have erupted in numerous states between conservative Republican governors who have resisted imposing mandatory face mask and vaccination rules in their states at schools and businesses, although some education and municipal leaders are advocating tougher rules to try to prevent the spread of the Delta variant.

U.S. President Joe Biden has ordered workers at companies with 100 or more employees to get vaccinated or be tested weekly for the coronavirus. In addition, he is requiring 2.5 million national government workers and contractors who work for the government to get vaccinated if they haven’t already been inoculated.

In recent weeks, about 150,000 new cases have been identified each day in the U.S. and more than 2,000 people are dying from COVID-19 every day.    

More than 66% of U.S. adults now have been fully vaccinated against the coronavirus, and overall, 54.9% of the U.S. population of 332 million have completed their shots, according to the Centers for Disease Control and Prevention.

 
…

Chinese officials are bracing for a potential financial crisis as giant real estate conglomerate China Evergrande Group appears to be unable to make good on bond payments due on Thursday. 

According to the Wall Street Journal, the central government has instructed local officials across the country to begin “getting ready for the possible storm,” if the firm is unable to come to an agreement with creditors. Evergrande is currently carrying a staggering load of more than $300 billion in debts and other liabilities. 

The central government in China is concerned about civil unrest because of both the size and the nature of Evergrande. The company has more than 800 construction projects spread across every province in the country, employing thousands of Chinese workers and engaging with an untold number of suppliers.

Many of the projects are housing units for which individual buyers paid large sums of money in advance. In some cases, construction has already been halted because the company has been unable to pay suppliers.

In addition to angry homeowners, the company is facing complaints from individual investors who have placed money in the company’s publicly traded shares. Since July of 2020, the company’s share price has plummeted by 91%, to about 34 cents a share today. 

Actual default may be postponed 

Evergrande had two major bond payments due Thursday. One, denominated in U.S. dollars, was for $83.5 million. The agreement with creditors gives the company a 30-day grace period before it is officially considered to be in default. However, failure to make payment on the due date will be seen as a very bad sign by the financial markets. 

The second bond payment was denominated in Chinese renminbi, and the company announced Wednesday that the debt had been “resolved through off-exchange negotiations” — though what exactly that means and how much the company actually paid is not clear. 

In addition to its real estate holdings, Evergrande has a wide array of subsidiaries, including an electric vehicle manufacturer, a soccer team, two theme parks, and a life insurance company, among other things. The company has been trying to sell off some of those assets to help pay its debts, but so far it does not appear to have been successful in raising enough cash to satisfy its creditors. 

The company’s chairman, Hui Ka Yan, has been striving to instill confidence in the company. In a memo to employees this week, he praised the company’s workforce as “an invincible army that is loyal and bears hardship without complaint.”

Hui added, “I firmly believe that Evergrande people’s spirit of never admitting defeat, and becoming stronger when the going gets tough, is our source of strength in overcoming all difficulties!” He promised that the company would emerge from its “darkest hour.” 

Government intervention possible 

Signals from the Chinese government about its intentions toward Evergrande have been mixed. In recent weeks, the government has not suggested that it intends to help the company. On Wednesday, the government issued a vaguely worded statement urging the company to “avoid near-term default” on its dollar-denominated bonds. 

Many experts believe the Chinese government will step in if it appears that Evergrande is facing collapse — deeming it too big to fail. However, that does not mean that all stakeholders in the company will be made whole. Most likely to be hurt are those holding the company’s U.S. dollar-denominated debt, who will face a “haircut” — meaning that they will be forced to accept payments of less than they are owed by the massive company. 

“It’s unlikely that the Chinese government will allow chaos to ensue,” said Doug Barry, a spokesman for the U.S.-China Business Council. “They have plenty of money to cover the losses, though foreign bond holders may receive a sizable haircut.” 

Major restructuring possible 

Experts expect that the Chinese government eventually will organize a major restructuring of the company. That would involve selling off large parts of Evergrande to other Chinese companies — probably state-owned firms. Those transactions would likely be facilitated by funding from state-owned banks. 

The goal, experts say, would be to avoid the collapse of housing projects that the company has already sold to Chinese buyers, and the related loss of construction jobs and related economic activity that would entail. 

“The government may help in restructuring Evergrande with shareholders and bondholders taking a big hit,” said Robert Dekle, a professor of economics at the University of Southern California. “This is overall good for China, reducing over-borrowing and moral hazard in the future.” 

A positive change 

Although a restructuring of Evergrande would be painful — especially for its investors — it could have important positive implications for the future of the Chinese economy. The country is currently dotted with thousands of “zombie” companies that have been kept solvent only by continued infusions of cash from state-owned banks. By refusing to bail out Evergrande’s bondholders and investors, the Chinese government may be signaling that in the future, companies will be expected to stand — or fall — on their own. 

“Longer term, China needs to get its financial house in order, especially throwing light on the shadow economy where even more debt bombs and zombie companies may lurk,” said Barry, of the U.S.-China Business Council. “Odds are good that the government will get on top of things without serious damage to the domestic or global economy. It’s a sobering reminder of the role China plays and the need for more transparency and fewer shadows and casino activities.” 

Global contagion seen as unlikely 

Evergrande’s troubles have caused investors in other high-yield Chinese debt to become cautious, demanding much higher interest rates to compensate for the perception of increased risk. 

However, experts believe that the fallout from the company’s troubles will have limited impact outside of China.

“Apparently there are other Chinese property developers in trouble,” said Dekle, the USC economist. “But the fact that Chinese authorities have allowed the firm to reach near bankruptcy suggests that the fallout will be self contained.” 

Voice of America Mandarin Service reporter Mo Yu contributed to this story. 

 
…