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Opinion
Shuli Ren

Is China Stumbling Into Its Own Mortgage Crisis?

A rapidly spreading protest — borrowers refusing to make payments on unfinished homes — threatens to rattle the financial system.

An unfinished China Evergrande Group project near Nanjing, China, in October.

An unfinished China Evergrande Group project near Nanjing, China, in October.

Photographer: Bloomberg/Bloomberg

It is spreading like wildfire. Homebuyers in China are refusing to pay the mortgage on properties they’ve bought but that their financially strapped developers can’t finish. Some say that they will only resume payments when construction restarts.

The protest involved more than 100 delayed projects as of July 13, up from 58 projects just one day earlier. The frustrated buyers accuse the developers of misusing sales proceeds and the banks of failing to safeguard their loans.