Meanwhile, the CCP is trying to contain a growing real estate meltdown, and people are getting nervous. Social unrest in China is one of the key ingredients that could push CCP towards moving on Taiwan.

One key issue: The Chinese urban middle class, one of the most important groups for Chinese Communist Party support, has invested heavily in property. As part of government housing reforms in the 1990s, urban residents were handed apartments that previously belonged to their work units, forming the cornerstone of their new wealth. That has made them enthusiastic property speculators and often resulted in large protests after local attempts to control prices—leading the authorities to back off.

Thanks to China’s extraordinary growth rates and the range of tools available to its central government, these problems have always just about stayed under control. But the concern with Evergrande is that it could be Beijing’s Lehman Brothers, pushing a long-brewing catastrophe over the edge. The government is doing its best to avoid that by unspooling the company slowly—through targeted interventions and conversations between regulators and debtors—rather than allowing a single moment of collapse.