Industry Voice: Controlled deflation of the China property debt balloon

Beijing’s policy actions in the property sector seem to be containing any potential contagion effect

clock • 2 min read
Industry Voice: Controlled deflation of the China property debt balloon

What Is Happening With Evergrande?

Evergrande is the second‑largest property developer in China by contracted sales (USD 111 billion in 2020). It has a 5% market share in the sector, which, together with the supply chain, composes over a quarter of economic activity in China. The company has undergone aggressive debt‑funded growth in the past few years as the sector grew rapidly, with urbanization remaining a focus in Beijing's five‑year plans. As of June 2021, Evergrande had a total liability of more than USD 300 billion, almost triple what it had at the end of 2015.




Important Information

For professional clients only. Not for further distribution.

This material is being furnished for general informational purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, and prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request.

It is not intended for distribution to retail investors in any jurisdiction.

This material is issued and approved by T. Rowe Price International Ltd, 60 Queen Victoria Street, London, EC4N 4TZ which is authorised and regulated by the UK Financial Conduct Authority. For Professional Clients only.

© 2021 T. Rowe Price. All rights reserved. T. ROWE PRICE, INVEST WITH CONFIDENCE, and the bighorn sheep design are, collectively and/or apart, trademarks or registered trademarks of T. Rowe Price Group, Inc.


More on Risk Reduction

Smiths Group fund completes £640m buy-in with Rothesay

Smiths Group fund completes £640m buy-in with Rothesay

The deal protects the benefits of 800 pensioners and 7,950 deferred members

Holly Roach
clock 30 June 2022 • 2 min read
K3 Advisory and Cartwright complete £40m buy-in

K3 Advisory and Cartwright complete £40m buy-in

Deal secures benefits for 89 deferred members and 52 active members

Martin Richmond
clock 28 June 2022 • 1 min read
Belfast, Northern Ireland: Headquarters of BHH Limited

Barnett & Hall secure £21m full scheme buy-in with L&G

Fourth-generation family business secures benefits for 110 scheme members

Hope William-Smith
clock 23 June 2022 • 2 min read