Updated: Nov 10 2021 09:51 IST
Washington [US], Nov. 10 (ANI): The United States central bank has warned that China’s ongoing real estate troubles could increase financial tensions in China, further straining global financial markets and negatively impacting the United States.
In its semi-annual report on financial stability, the Federal Reserve specifically pointed to the crisis at Evergrande, China’s most indebted developer, CNN reported.
The company has feared contagion since September after warning it could default on its debts of more than $300 billion. Several other real estate developers are also in trouble.
While “Chinese authorities have taken steps to cool down real estate markets,” there is a risk that “financial vulnerabilities will continue to increase,” the Fed noted.
The central bank warned that given the size of China’s economy and financial system, and its global ties, “financial tensions in China could weigh on global financial markets as risk sentiment deteriorates, pose risks to global economic growth and could affect the United States.”
Shares in Hong Kong, New York and other major markets were previously impacted by fears of contagion from Evergrande and a slowdown in Chinese growth. (ANI)