We think that the ‘China’s Lehman moment’ narrative is wide of the mark. On its own, a managed default or even messy collapse of Evergrande would have little global impact beyond some market turbulence. Even if it were the first of many property developers to go bust in China, we suspect it would take a policy misstep for this to cause a sharp slowdown in its economy. In a hard-landing scenario, several emerging markets are vulnerable. But in general, the global impact of swings in Chinese demand is often overstated.
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