Signs have emerged that the slowdown in China's property market could lead to contagion in the broader economy, as Evergrande files for bankruptcy protection.
Please use Chrome browser for a more accessible video playerHowever, the company - which specialises in affordable housing - has been caught out by its more prominent positioning in smaller and less developed cities in China, where house prices have fallen more rapidly during the last year or so than they have in the large conurbations.
There is also a danger that they further depress sentiment towards the housing market, where activity has been stifled in recent months, despite attempts by the authorities late last year to stimulate activity. Jennifer McKeown, chief global economist at Capital Economics, told clients this week that Beijing could be expected to backstop Country Garden if its problems looked like spiralling into a full-blown credit crunch.
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