China’s property woes bleed into the economy

FROM Aug to Dec 2022, close to US$50 billion of Chinese property bonds are maturing.

China’s property woes, with the mountain of debt maturing and refinancing challenges, are threatening to spread beyond the sector that accounts for a quarter of the country’s gross domestic product, and into the wider economy, analysts say.

Last Wednesday (Aug 10), investors watched in dismay as Hong Kong-listed Longfor - China’s leading private developer with investment grade rating - tumbled 19 per cent after UBS downgraded the stock on cash flow concerns. The stock was further battered by rumours of unpaid commercial bills, which the management denied in an urgently set-up call with investors that evening. It also stressed its relatively solid debt structure and ability to continue to buy land plots.