Evergrande crisis poses dilemma for China’s Communist Party regulators

China’s second-largest property developer— and the world’s most indebted real estate firm with $300 billion of liabilities—faces interest payments this week that it is struggling to make.

A growing crisis at troubled Chinese , that appears likely to default on interest payments this week, has posed a hard choice for regulators of China’s ruling Communist Party, as they look to contain the fallout while pushing ahead with leader Xi Jinping’s on-going crackdown on debt.

China’s second-largest property developer— and the world’s most indebted real estate firm with $300 billion of liabilities—faces interest payments this week that it is struggling to make, sparking broader concerns on the impact on China’s real estate market, a key driver of growth in the world’s second-largest economy.

While China’s authorities had many levers at their disposal to manage the debt crisis and avoid a “hard landing”, they still face a challenge, the Asian Development Bank’s Director of Macroeconomic Research, Abdul Abiad, said on Tuesday.