What Happened to China’s Real Estate Developers?

Since the second quarter of 2021, there have been increasing levels of concern in respect of the debts due by China’s real estate developers, leading to questions including: 1. what caused the debt crisis; how would this crisis impact on China’s economy, its real estate market and its banking and financial system; would the government rescue distressed developers; what should investors and shareholders expect.

China’s real estate market has experienced strong growth since 2000, as a result of a number of factors, including:

• China’s economic growth since its entry to the World Trade Organization in 2000
• Local provincial governments relying on the assignment or sale of land use rights as a major source of revenue
• China’s quantitative easing in 2008
• China’s monetary easing policies in 2015

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This article was first published in INSOL World Q1 2022.