NOVEMBER 21, 2016
For most of China's deeply indebted companies, another prolonged slump in the country's housing sector could be catastrophic.
Barring a decision to loosen government controls on credit, investment and home purchases, China's housing and construction sectors will slow in 2017.
Industries that hold the bulk of China's outstanding corporate debt, including commodities, building materials and other sectors related to construction, will bear the brunt of a sustained housing slump.
Sluggish construction growth and skyrocketing debt, coupled with sharp reductions in debt maturity periods, could cause corporate defaults and bankruptcies to spike next year, testing Beijing's legal and institutional abilities to cope with them.
Meanwhile, increasing U.S. protectionism and other international developments could put even more pressure on the Chinese economy, forcing Beijing to trade its economic reforms for greater spending to keep the economy afloat.