The Chinese authorities will support developers. Will it help get out of the crisis

The volume of residential space sold in CHINA fell by 24% in 2022, the sharpest decline since 1992, when the data became available. Real estate investment was down 10% year on year, the first drop of all time.

During the boom in real estate demand, annual sales of dollar-denominated offshore bonds rose to $64.7 billion in 2020 from $675 million in 2009. Non-transparent liabilities made it difficult to assess credit risks. To prevent the emergence of a bubble in the market, the state had to limit the access of developers to borrowed funds - this led to a liquidity crisis.

With developers largely cut off from credit markets, they have defaulted on more than 140 bond issues in 2022, according to BLOOMBERG data. In general, developers were in arrears on domestic and foreign debt obligations totaling $50 billion, based on the volume of issuance.

China Evergrande, once the country's largest real estate developer, went into default in December 2021 after it defaulted on several bonds. Other companies followed suit, including Kaisa Group Holdings and Sunac China Holdings. The defaults have destroyed what was once the most active and lucrative high-yield bond market in the world.