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China's Crackdown Brings Developers Crashing Back to Earth

  • Shares of Sunac, Evergrande tumble after scorching gains
  • Chinese cities unveil a raft of property curbs to cool market
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Economist Xie: China Property Market a Ponzi Scheme

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The world’s most extreme stock rally is getting a reality check.

After share price gains at Chinese property developers accelerated at a breathtaking pace in the past month, led by an 87 percent surge in Sunac China Holdings Ltd., the momentum has started to turn as authorities have taken a harder line on reining in financial risks. Six of the 10 best performers on the MSCI All-Country World Index in the one month through Sept. 21 were Chinese real estate firms. Chinese developers had their biggest slump in six years on Monday and slipped again on Tuesday.