Financial problems at Country Garden, once considered among China’s strongest developers, will further undermine confidence among homebuyers and creditors, exacerbating the property downturn. The sector has already gone through a wrenching adjustment and its problems are now widely known, so the impact of Country Garden’s woes is unlikely to be as severe as the fallout from Evergrande’s default two years ago. Still, with the economy in worse shape now than it was then, even a smaller hit could be destabilising.
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