EDITORIAL: China’s economy may prove riskyWith rising default risks from Country Garden Holdings Co to China’s leading asset management firm, Zhongzhi Enterprise Group Co, concerns are growing that a slump in the Chinese property market could trigger a wider financial crisis, creating a potential spillover effect that would impact the broader economy. Taiwanese financial firms have slashed their exposure to the world’s second-largest economy quickly and sizably. Bad news has repeatedly broken out in China’s real-estate industry in recent years with the risk of a snowballing economic downturn. However, more actions are still needed if Taiwanese financial firms aim to promptly respond to any major financial events in China. To tackle headwinds, firms must review and adjust their holdings of Chinese securities and bolster risk management after extending loans to the Chinese market.
