Evergrande Is a Too Big to Fail Question for Beijing: Milken’s Lee

The video discusses the microeconomic incentives that lead to empty skyscrapers in China, focusing on the potential collapse of Evergrande and its implications for China's property sector. It highlights the importance of property as a savings vehicle for Chinese families and the challenges faced by policymakers in Beijing. The video explores whether Evergrande is too big to fail and the potential for Beijing to intervene, either directly or indirectly, to stabilize the market. It also examines the roles of municipal and federal governments in addressing property sector issues and the efforts to reassure the public while developing alternative investment avenues through capital markets.

What has been a significant factor in China's development strategy related to the property sector?

• Advanced financial instruments

• Microeconomic incentives for skyscrapers

• Focus on agricultural development

• High consumer demand for electronics

What is the main concern regarding Evergrande's potential collapse?

• Whether it is too big to fail

• Its impact on global oil prices

• The effect on China's agricultural sector

• Its influence on international trade agreements

How might Beijing respond to the Evergrande crisis?

• By reducing taxes on property

• By directly or indirectly taking on some of the debt

• By investing in foreign markets

• By increasing interest rates

What role do municipal governments play in the property sector issue?

• They manage the financial instruments in China

• They handle property-related issues unless overextended

• They are responsible for international trade policies

• They regulate the stock market

What has Beijing been trying to develop as an alternative to property investment?

• Manufacturing sector

• Agricultural exports

• Capital markets

• Tourism industry