Beijing Fails To Stanch Fears of Tottering Property Market Collapse
The Chinese government has eased restrictions on the property sector, but the crumbling of debt-ridden companies, such as China’s Evergrande Group, is still shaking markets.
Photo Insert: Evergrande is the fallen domino that seems to have set off what is looking like the collapse of China's property market.
A move by recession-hit Heilongjiang province to boost the sector sparked temporary recovery, which slumped again after reports of the decision were deleted from government websites, James Palmer reported for Foreign Policy.
It’s not a surprise that authorities are kicking perennial real estate problems down the road yet again, but the crisis’s extent may end up forcing action anyway.
Evergrande’s collapse is being as carefully managed as possible by the government, but another company is now on the radar: Shimao Property Holdings. Shimao is the 13th-largest developer in the country and seemed to be in relatively good shape.
But the firm proved to be a lot more vulnerable than many observers thought: Unexpected worries over its ability to handle debt prompted sharp sell-offs and downgraded its credit rating.