HONG KONG/NEW YORK, Aug 18 (Reuters) - Embattled developer China Evergrande Group (3333.HK) has filed for U.S. bankruptcy protection as part of one of the world's biggest debt restructurings, as anxiety grows over China's worsening property crisis and its impact on the weakening economy.
China unexpectedly lowered several key interest rates earlier this week in a bid to shore up struggling activity and is expected to cut prime loan rates on Monday, but analysts say moves so far have been too little, too late, with much more forceful measures needed to stem the economy's downward spiral.
Once China's top-selling developer, Evergrande has become the poster child of an unprecedented debt crisis in the country's property sector, which accounts for roughly a quarter of the economy, after facing a liquidity crunch in mid-2021.
The developer has sought protection under Chapter 15 of the U.S. bankruptcy code, which shields non-U.S. companies that are undergoing restructurings from creditors that hope to sue them or tie up assets in the United States.
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DOMINO EFFECT?
The property crisis has also fanned worries about contagion risks to the financial system, which could have a destabilising impact on an economy already weakened by tepid domestic and foreign demand, faltering factory activity and rising unemployment.
A major Chinese asset manager has missed repayment obligations on some investment products and warned of a liquidity crisis, while Country Garden (2007.HK), the country's No.1 private developer, has become the latest to flag a stifling cash crunch.
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https://www.reuters.com/world/china/...ul-2023-08-18/
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