China’s Bad Debt Funds Are No White Knights in Property Crisis
- Debt woes at Huarong, others worsened amid real estate slump
- Beijing was counting on these funds to bolster developers
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China’s bad-debt managers, pegged just six months ago as potential white knights to the crumbling real estate sector, have turned out to be part of the problem.
Aggressive lending to embattled developers during the sector’s boom years has beset the $730 billion funds with heavy credit losses, sending their bonds tumbling and forcing Beijing to weigh a preliminary plan to restructure the sector, according to people familiar with the matter.