In late September, Evergrande, China’s second largest property developer, was on
the brink of default when it appeared unable to make interest payments on
offshore and domestic bonds. Although there is a slim possibility that default
could be avoided in the near term, a collapse seems inevitable in coming months
– given the company’s dire financial position. This issue has highlighted concerns
around the China’s broader corporate debt levels and raised fears of financial
contagion – which if fully realised could negatively impact the broader
construction sector, as well as the Chinese and global economies. These fears also
extend beyond just one company – with looming debt obligations in coming years
an issue for Chinese authorities.

For further details, please see the China Economic Update – October 2021