Chinese Evergrande is on the brink of collapse

With the likelihood increasing every day that the massively indebted group will be dismantled to avoid triggering a market-wide panic, trade in one of its bonds was suspended in Shanghai on Monday after it plunged 25%.

Evergrande has been struggling to manage its enormous $300billion debt pile for several years but tougher regulations about debt levels brought in last year as part of president Xi Jinping’s drive against inequality has accelerated its crisis. A firesale of its properties has failed to dent the debt pile despite generous discounts, a strategy further undermined by falling house prices.

A disorderly failure of Evergrande would represent a serious risk to the whole Chinese economy, with the risk of contagion in the rest of the world.