Even State-Backed China Developers at Risk of Surging Default, Citi Says
- SOE developers are biggest drivers of this year’s increase
- Overall systemic risk is still ‘manageable’ for Chinese banks
This article is for subscribers only.
Financial contagion has spread so far across China’s property industry that even state-backed developers are at risk of surging defaults, according to Citigroup Inc. analysts.
Bad debt climbed to about 29.1% of total property loans in the first half of this year, up from 24.3% at the end of 2021, according to calculations by Citi’s team including Judy Zhang. The increase is largely attributable to developers controlled by the Chinese government, the analysis showed.