China’s debt crisis is getting worse and still has a long way to go. How will China escape this economic disaster? If I had to put money on it, I’d guess they choose the worst possible option.

China could nationalize the property developers who caused the problem.

“China could nationalise its massively indebted property companies to save the country’s real estate sector, according to a report by a leading short seller, using legislation that could ban land sales to private developers.

The country’s developers are struggling, with Evergrande, once China’s largest, buried in more than $300 billion in liabilities. The cash-strapped company’s troubles and contagion worries have sent shockwaves across global markets.

The issue worsened this week as Yango Group offered a distressed debt exchange on some US dollar bonds for new notes personally guaranteed by its chairman to avoid defaulting on upcoming debt payments.”

From the Asia Financial.