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Govt, BI keep watchful eye on China’s Evergrande
Indonesia’s economic chiefs remain wary of knock-on effects from default risks at China’s second-biggest property developer as it sends chills to global markets.
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A general view shows the Evergrande Center building in Shanghai, China, on Sept. 22, 2021 (AFP/Hector Retamal)
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ndonesia’s economic chiefs are wary of China Evergrande’s default risk, which has been sending chills to the global capital market and may have knock-on effects on Indonesia.
Finance Minister Sri Mulyani Indrawati said Evergrande had become a source of risk to China’s financial sector stability. A default, she added, would impact more than just China’s domestic economy, but also the world.
“So, we have to be wary of Evergrande’s default phenomenon,” Sri Mulyani said during an online press conference on Thursday.
Evergrande is closely entangled with China’s domestic economy. Given its key position, many financial institutions have either direct or indirect exposure to the company’s debt.
The People's Bank of China has poured 90 billion yuan into the country’s banking system to underpin market confidence.
Read also: Stocks find fleeting relief in Evergrande deal
Sri Mulyani went on to say that conditions in China's economy could affect exports and commodity prices around the world, as the country was also one of the main drivers of the global economic recovery, along with Europe and the United States.
