Chinese property developers are in ‘survival mode’ amid ongoing debt crisis

Construction starts on new developments in China fell at the fastest pace since 2013, dropping to 96.44 million square meters (1 billion square feet), according to data from the National Bureau of Statistics of China.

Reuters reports that new construction starts slumped 45.4 percent in terms of floor area in July and total investment in the property industry fell 6.4 percent year-on-year in the first seven months of 2022. This represents the largest drop since March 2020.

In July, property investment also decreased 12.3 percent year-on-year, to RMB 1.1 trillion ($163 billion).

In 2020, regulators issued strict guidelines on new borrowing by developers, which has resulted in developers defaulting on their debts and struggling to complete projects. Since then, developers have been “in survival mode,” as one anonymous source told Reuters.

CNBC reports that the market share from property bonds has fallen as a result of the country’s property de