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Two thirds of China's top developers breach state's 'red line' on debt

Developers are facing rising financial stress as stricter rules around borrowing and a deleveraging campaign weigh on the sector.

A view of development project somewhere in China. The country’s indebted developers are struggling to meet Beijing’s tighter financing rules. (Bloomberg photo)
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A view of development project somewhere in China. The country’s indebted developers are struggling to meet Beijing’s tighter financing rules. (Bloomberg photo)

Olivia Tam | Bloomberg
China’s indebted developers are struggling to meet Beijing’s tighter financing rules. 

Two-thirds of the top 30 Chinese property firms by sales ranked by the China Real Estate Info Corp. have breached at least one of the metrics known as the “three red lines,” Bloomberg-compiled data showed as of Oct. 29. 

Developers are facing rising financial stress as stricter rules around borrowing and a deleveraging campaign by authorities weigh on the sector. A liquidity crisis at China Evergrande Group has roiled markets, with the nation’s real estate sector making up almost half of the world’s distressed dollar-denominated debt. Speculative-grade yields briefly

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First Published: Oct 31 2021 | 9:23 AM IST

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