Investors - DECEMBER 3, 2021

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Credit market and property market contagion in China

by Jennifer Molloy

When news broke in September 2021 that property developer China Evergrande Group might default on loan repayments, global markets took note. Amid ongoing default risk among other Chinese property developers as well, what is the current state of China’s credit market and real estate market, and how much do investors need to concern themselves about possible regional and global knock-on effects?

These questions are addressed in China’s Contagion Risks Rise, a November 2021 report from S&P Global Ratings by Charles Chang, Greater China country lead, corporate ratings, with the firm. He says contagion risks have been mostly local and are not yet global. Here are the key takeaways from the report:

Credit market contagion

China will continue to drag on Asia’s new-issue market, as tightening polices are unlikely to be reversed over the near term. 2021 has seen significant issuer events, which have hit investor sentimen
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