Ordinarily, Beijing would eagerly rescue its property developers and enact aggressive policy easing to prop up a sagging real estate market.
But these are not ordinary times.
Despite facing terrible economic conditions and outlook, China’s financial policymakers have only responded with relatively modest easing measures. The reason is twofold. One, regulators want to curb excess leverage in the property sector and there’s disagreement on whether or how much to bail out the industry. And two, Beijing fears the ineffectiveness of stimulus measures, especially in areas under COVID-related lockdowns.
Headlines have moved on and Evergrande is seldom in the news, but real estate developers are still struggling, and it’s spread to beyond a few names. Sunac China Holdings Ltd., the country’s number four property developer by sales and formerly had one of the stronger balance sheets in the sector, in May defaulted on a $29.5 million interest payment on its offshore dollar bonds….