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.