CNBC's Eunice Yoon discusses a Wall Street Journal report that says China is asking local governments to prepare for Evergrande's downfall. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Chinese authorities have told local officials to prepare for a potential demise of heavily indebted property developer Evergrande, The Wall Street Journal reported Thursday.

Local officials described the signals from Chinese authorities as “getting ready for the possible storm” and said the government told them they should only step in at the last minute to prevent spillover effects from Evergrande’s demise, the WSJ report said.

The report indicates that the central government may still have a limited appetite for bailing out the company, despite the global implications. Fears about Evergrande not being able to make interest payments have grown in recent weeks and were seen as one of the causes for market sell-offs around the world Monday.

The company resolved payment on a local bond on Wednesday, helping to boost Asian markets. However, it is unclear if the company will pay interest due Thursday on its offshore bonds.

Bloomberg reported Thursday that authorities in Beijing told the company not to default on those dollar-denominated interest payments.

Evergrande is a conglomerate company that grew to massive scale amid a debt-fueled building boom in China. The high level of corporate debt has created concern in Beijing, leading to China place restrictions on lending that, along with a decline in housing demand, appear to have hurt Evergrande.

CNBC reached out to Evergrande for comment.

Read more about this story at The Wall Street Journal.

» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC
» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-n...

Connect with CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC

https://www.cnbc.com/select/best-cred...

#CNBC
#CNBCTV