(Yicai Global) Oct. 20 -- Chinese property giant China Evergrande Group’s financial crisis amounts to individual company risk. China is confident that the risk can be controlled and will not turn into systematic risk, according to an article published on the central bank’s website today, citing Governor Yi Gang.

Evergrande has amassed debts of USD300 billion, one third of which are financial debts with dispersed creditors and collateral. But the spillover effects to the financial sector are generally controllable, Yi said at the G30 36th Annual International Banking Seminar held last weekend.

The Guangzhou-based developer’s main risks are unpaid debts, suspended work at some construction sites and whether it can deliver properties to buyers who have paid deposits on schedule.

China's response measures aim to prevent these risks from spreading to other property companies and the financial sector. China will adhere to the rule of law and ensure that the legitimate rights and interests of all creditors and stakeholders are addressed fairly.

The People’s Bank of China will also pay attention to the use of the digital yuan and is willing to strengthen cooperation with all parties, including central banks of other countries, the International Monetary Fund and the Bank for International Settlements, Yi said. Currently, there is no plan to promote the use of e-yuan in countries participating in the Belt and Road Initiative.

China's short-term economic growth faces some challenges but the momentum of steady economic recovery remains unchanged as a whole, Yi said.

These challenges include dealing with the pressure of slowing economic growth, keeping the macro leverage ratio basically stable, managing operational difficulties among some small and middle-sized lenders and preventing default risks by firms in certain sectors brought on by poor management and blind expansion, he added. But these issues do not yet pose systemic risks and the central bank will keep a close eye on them.

Editor: Kim Taylor