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China Faces a Crisis in Its Real Estate Sector



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A model Chinese property developer in a sector replete with risk takers is teetering on the edge of default. Short of cash, one of China’s biggest asset managers has missed payments to investors. And billions of dollars have flowed out of the country’s stock markets.In China, August has been a dizzying ride.What started three years ago as a crackdown on risky business behavior by home builders, and then an ensuing housing slowdown, has spiraled rapidly this month. The broader economy has been threatened, and the confidence of consumers, businesses and investors undermined. So far, China’s typically hands-on policymakers have done little to ease anxieties and seem determined to reduce the country’s economic reliance on real estate.“What is happening in the Chinese property market is really unprecedented,” said Charles Chang, who heads corporate credit ratings for Greater China at Standard & Poor’s.For the last three decades, as China’s population surged and its people flocked to cities seeking economic opport …

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