Dragging out bad news rarely makes it better. The same applies to China’s slow-motion property-market crisis. Housing developer Sunac this week said it would try to restructure its debts for the second time in 18 months. Nearly five years since Beijing tried to rein in overstretched builders, the sector’s debt doom loop is edging only slowly towards resolution.
Sunac, whose portfolio includes everything from grand neo-mansions to indoor ski slopes, said on Tuesday that it would rejig its overseas liabilities based on “actual conditions” rather than the “expectations” that underpinned its November 2023 deal. The week before, it had warned of worsening net losses as a result of slumping sales.
Liquidity crunches do not necessarily lead to liquidation, of course. Several US companies have entered its Chapter 11 bankruptcy process more than once, among them fashion retailer Forever 21, which sought the courts’ protection earlier this week. Should Sunac default again, it won’t even notch up another “first” for China: fellow developer Kaisa already did so, in 2015 and 2021.