Three kinds of businesses would suffer the most if China’s real estate troubles persist, according to ratings agency Fitch.
“The sector in general has been in difficulty since 2021. ... They do not have competitive advantages in infrastructure project exposure or funding access relative to their [government-related] peers," the report said."Many have been operating at a loss for a few months and could face liquidity issues if China's economy remains lacklustre, especially given the high leverage in the sector," the report said.
"Fitch believes the recent rise in the number of homebuyers suspending mortgage payments over stalled projects underlines the potential for China's property crisis to deepen, as diminishing confidence could stall the sector's recovery, which will eventually ripple through the domestic economy," the report said.
Businesses least vulnerable to real estate's problems were insurers, food and beverage companies, power grid operators and national oil companies, the report said.Chinese real estate developers came under increased pressure about two years ago when Beijing started to crack down on the companies' high reliance on debt for growth.
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