China has basically been the single biggest driver of global growth over the past decade. Its highly overleveraged real estate market is a huge threat to its overall economy, and that has plenty of potential to create a massive knock-on.
https://www.reuters.com/article/us-economy-global-kemp-colum...
I think what Western observers are missing is that this was an intentional "let fail" in order to prevent this structural weakness from becoming too big of a problem.
China is basically euthanizing this industry because they perceive it as a structural weakness.
I think what you're missing is that China isn't even out of the first inning on this one.
Evergrande hasn't even failed yet. It's a slow-moving trainwreck and the contagion is only just starting to spread.
https://www.reuters.com/world/china/chinas-state-council-hel...