Posted 1/10/2024, 8:10:00 AM
China Tries to Contain Real Estate Crisis to Protect Broader Economy
- China trying to manage real estate crisis so sector's troubles don't spill into broader economy
- History shows real estate booms fueled by credit usually end with major banking crises
- China's property sector grew rapidly since 1990s to account for up to 30% of GDP
- Debt ratios introduced in 2020 cooled market, but led to defaults and crisis in 2021
- As developers restructure debt, risks remain; banking sector also vulnerable due to exposure