Exactly 13 years ago and also in mid-September, Lehman Brothers, the US’ fourth-largest investment bank, filed for bankruptcy, brought down by its exposure to real estate through investment in subprime loans. Today, Evergrande, China’s second-largest real estate developer, is teetering on default. Debt and real estate, it seems, can be combustible anywhere in the world. China’s debt-fuelled real estate bubble was clearly worrying its policymakers. They point to China’s massive financial clout and the fact that the country’s debt, though large, is mainly domestic.
