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This is easy to see on a micro-economic scale: evictions are reaching a tragic level of generalization, workers are either refusing to show up to work or risking death for a paycheck, the prices of commodities are in flux, if things can be obtained at all. We can all clearly see the abandoned storefronts, the closing restaurants, the friends that are months behind on their rent. This is the case across much of the world, and like elsewhere the impacts of this obvious crisis are being mitigated by government spending, corporate debt, and economic subsidies. Unfortunately, for those that would like to see capitalism continue, these mechanisms are starting to run into some logical economic limitations, many of which were set into motion far before the pandemic and have accelerated in the last year and a half.
The framing of the contemporary economic situation around the pandemic is at best a partial explanation. It relies on the insistence on a discourse of anomaly—that these dynamics were just the result of an unforeseen event disrupting an otherwise stable economic situation. This framing ignores the economic dynamics which existed at the beginning of the pandemic, which were already trending toward a debt crisis, and approaches this situation as if it just emerged from nothingness. There are definitely clear, demonstrable, impacts that we can attribute to the pandemic. That is not in doubt. However, these impacts of the pandemic cannot be thought outside of economic history or, in a more immediate sense, global economic trends going into the pandemic. Many of the dynamics that have converged in the present, and which have now been accelerated by the pandemic, are the result of decades of deregulation and the financialization of international economics, with the more immediate causes being apparent in the approaches to the collapse of 2008.
To understand Evergrande, the context of the crisis, and how it interplays with a broader global dynamic, we have to think of the global economy and this local microcosm as operating in a reciprocal relationship. Evergrande is a massive corporation, with large amounts of foreign investors and a portfolio large enough to create systemic risk if the company ever does crash. As such, Evergrande is not purely a local phenomenon. The prevalence of foreign investment, combined with the reliance on foreign trade within the Chinese economy, has generated a context in which the collapse of a company like this could result in billions of dollars of lost capital globally, and in which global trade dynamics have massive impacts on Chinese economics and, as a state-run economy, governmental policy.
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h/t mark000