Shares of Evergrande plummet amid rising expectations of default.

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Shares of China Evergrande, the troubled real estate giant whose fate has contributed to jitters in global markets, fell again on Tuesday amid a fresh forecast that it would soon default.

The company’s chairman, Xu Jiayin, told employees in a letter quoted in Chinese media that Evergrande would overcome its problems, including $300 billion in debt, plummeting apartment sales and a payment due Thursday.

“I firmly believe that Evergrande will come out of its darkest moment and resume work and production at full speed,” he said in the letter, which was confirmed by a company spokesperson.

But Tuesday came a bleak prediction about the company’s fate for investors in Asia, this one from S&P Global Ratings. “We believe Beijing would only be forced to intervene if there is a far-reaching contagion that causes multiple major developers to fail and pose systemic risks to the economy,” the report, dated Monday, said.

Both the company’s stock and bonds fell on Tuesday, albeit by more modest amounts than in recent days and weeks. Shares closed 0.4 percent lower and shares of other China-focused developers that plunged Monday recovered some of their losses. Hong Kong’s Hang Seng index, which fell 3.3 percent on Monday, closed the day with a 0.5 percent gain.

The impact of an Evergrande collapse would largely depend on the attitude of top Chinese leaders.

Many of Evergrande’s problems stem from new restrictions on home sales as Beijing tries to tame property prices and allay growing concerns about home prices. The government has also tried to teach a lesson to developers who have borrowed heavily in recent years to build more real estate and fund their investments in other businesses. (In Evergrande’s case, those are interests such as electric cars and a soccer team.)

But a hard landing for Evergrande, should it default, comes with risks. Unhappy home buyers and suppliers can create unrest, while the financial consequences for investors and others who may be exposed to Evergrande can be costly.

However, Beijing has a number of ways to try and stop a financial disaster. The government controls the banks and the financial links between them. It also tightly controls the flow of funds across national borders, allowing it to stop a potential flow of funds outside the country.

“The officials still have a number of tools at their disposal to calm the panic,” said Zhiwu Chen, a professor of finance at the University of Hong Kong who predicted authorities would break up the company and disassemble the parts piecemeal. to sell.

The authorities can also control media coverage, while the police have considerable powers to arrest anyone who makes a fuss.

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