Signage at a residential project developed by Country Garden Holdings Co. in Baoding, Hebei province, China, on Tuesday, Aug. 1, 2023.Bloomberg | Bloomberg | Getty ImagesJPMorgan raised its global emerging markets corporate high-yield default forecast, largely due to rising contagion fears in China’s property sector from a possible Country Garden default.The U.S.-based investment bank raised its 2023 global forecast to 9.7% from 6% in a note dated Aug. 15. It also raised its Asia high-yield default rate forecast to 10% from 4.1% — that figure drops to just 1%, if China property is excluded.JPMorgan expects China property to account for nearly 40% of all default volumes in 2023, followed by 35% from Russian corporates and 12% from Brazilian issuers. The magnitude of the increase in JPMorgan’s default risk assessment underscores fears that a Country Garden debt default will have a far broader ripple effect on the Chinese property sector and the broader economy.Country Garden has a far bigger and broader portfolio of developments than China Evergrande Group, which fell into default in 2021 and announced an offshore debt restructuring program in March. Country Garden, …
