© Reuters. File Photo: The aerial photo shows a house on October 22, 2021 at the construction site of the Evergrande Group Project, an Evergrande Group project in China, located in Taicang, Suzhou, Jiangsu Province, China.
Shanghai (Reuters)-The spillover effect of Chinese real estate companies on the financial industry is generally controllable due to concerns over China’s Evergrande Group, state media said Monday.
The comment was posted in Xinhua’s Q & A session on the Chinese economy, stating that the news agency interviewed “related departments” and “authoritative people.”
An article that did not directly nominate China Evergrande stated that real estate companies faced default problems due to poor management and the inability to adjust their operations to market changes.
“We need to understand that there are clues as to whether real estate is likely to default, so we can predict the risk of spillover to the financial industry,” Xinhua said.
In addition, the real estate tax reform will be steadily promoted.
At risk of debt of more than $ 300 billion, Evergrande seems to have avoided default by paying last-minute bond coupons last week. He said on Sunday that he resumed work on more than 10 projects in six cities, including Shenzhen.
The problem has reverberated across the $ 5 trillion real estate sector in China, accounting for a quarter of the economy on some indicators, with a series of default announcements, downgrades and a downturn in corporate bonds.
The debt crisis is also widely watched by global financial markets, which are concerned about broader transmission.
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Controllable spillover from China’s real estate debt risk
https://www.investing.com/news/stock-market-news/spillover-from-chinas-property-debt-risks-is-controllable–xinhua-2653500 Controllable spillover from China’s real estate debt risk