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Opinion
Shuli Ren

No One’s Too Big to Fail in China’s Property Market

Beijing has set strict guidelines to protect the real-estate sector. Luckily many developers are in the clear.

Too big to fail?

Too big to fail?

Photographer: Chan Long Hei/Bloomberg

For years, investors happily bought into the dollar bonds of Chinese real-estate developers, betting that the biggest and most aggressive would become too big to fail. Even during the global markets selloff in March, private bankers told their wealthy clients not to worry. In the worst case, they could just hold those notes until maturity, and enjoy the juicy coupon payments. 

China Evergrande Group’s recent tumble is a wake-up call. Beijing’s latest policy shifts show it is confident that killing a dragon or two won’t cause a wildfire.