| Evergrande misses bond repayment. Asian stocks look set to slip. The divide between Singapore and Hong Kong grows. Here's what you need to know today. Evergrande still isn't paying bond investors. Some holders of two different dollar notes with coupons due Monday said they'd yet to receive their money, bringing the developer's total interest owed to $148 million. The company has a 30-day grace period to make good. Evergrande's former chief economist, Ren Zeping, said his warnings to reduce debt and halt plans to diversify into new businesses fell on deaf ears. Meanwhile, a report suggests China is widening scrutiny of private industry by examining ties to state banks and regulators. Asian stocks looked set to slip on concerns about elevated inflation stoked by energy costs and the possibility of a widening Chinese crackdown. The dollar climbed. Futures for Japan, Australia and Hong Kong dipped after the S&P 500 and Nasdaq 100 fell for a second day as the prospect of a slowing recovery from the pandemic shadowed trading.  | The divide between Asia's two main financial hubs in handling the pandemic is growing ever wider. In Singapore, officials are taking steps to reconnect with the global economy even as the government faces pressure to favor locals over foreigners for high-paying jobs. Hong Kong has taken the opposite approach in following China's Covid Zero approach that tolerates no local infections. The city-state is considering more vaccinated travel routes after opening up to the U.S. and other key trading partners, and it's keen to work with neighbors, including Australia, New Zealand and Japan. Elsewhere in the region, Thailand has unveiled a roadmap to revive its tourism-reliant economy by gradually scrapping a mandatory quarantine for vaccinated visitors. India's equity market is on the cusp of overtaking the U.K.'s in value to join the world's top-five club, at least by one measure. The likely feat comes as record-low interest rates and a retail-investing boom propel stocks in the former British colony to new highs. India's market capitalization has surged 37% this year to $3.46 trillion. Meanwhile, the U.S. and China remain far apart on economic and trade questions, with recent statements from both sides showing just how big that gap is. Myanmar could be on the brink of economic collapse. The country is battling a plunging local currency, with the kyat tumbling about 50% since the military seized power in February, during an unprecedented dollar shortage. That's driving up the cost of imports and worsening the economy's struggle with dual challenges of the pandemic and post-coup financial isolation. The currency selloff is the latest crisis to hit the country, which is still grappling with protests following the ouster of the civilian government led by Aung San Suu Kyi. What's caught our eye over the past 24 hours: If you're looking for a framework through which to try to gauge the impact of Evergrande and a property sector slowdown on China's overall economy, you could do a lot worse than Michael Pettis's. Speaking in the latest episode of Odd Lots, the Peking University finance professor describes how many of the problems currently facing the Chinese economy can be traced to a tension between two different flavors of economic growth in China: "You have what Beijing has been calling high-quality growth, which is really consumption exports and business investment oriented towards consumption and exports. That's what I would call the sustainable growth, the real underlying growth in the economy. And then you have what I would call residual growth, which is really investment in the property sector and local government spending on infrastructure. And the purpose of that residual is to bridge the gap between the real underlying growth in China and whatever the GDP growth target is, which has always been much higher — in my opinion at least twice the real underlying growth."
Trouble in the property sector effectively means China is unwinding some portion of the residual growth — the stuff that bridged the gap between "real" economic growth and the GDP target. It also means China will need to lower its GDP target or secure a replacement engine of growth, things like an increase in domestic consumption, a push into more productive types of investment or government-funded infrastructure investment. The first two options are much easier said than done of course, but thinking about it in these terms does help explain why we're seeing such a push for "common prosperity" and its attendant redistribution of wealth, and an emphasis on hard tech. The full Odd Lots episode is well worth a listen. You can follow Tracy Alloway on Twitter at @tracyalloway. | 
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