China economic focus September 2021: default risk rocks property market

China’s property market is experiencing default risks, originating from a financial crisis at leading property developer China Evergrande. The situation is the result of the government tightening housing policies with the intention to rein in speculative housing demand, and to shift the growth driver of the economy from investment to consumption. In the long term, property market fundamentals will remain robust but urban housing completions will peak in 2022. The demand trajectory for commodities related to property construction, including steel, copper, coal and natural gas, varies based on their different applications in this sector.