China's property market is now the No. 1 concern for fund managers worried about a "global systemic credit event," a new Bank of America survey says.

A third of respondents cited Chinese real estate as the most serious credit risk, just ahead of U.S. and EU commercial real estate, which were mentioned by 32% of respondents to the survey, as reported by Reuters.

Renewed trouble in the Chinese real estate market, in the form of a narrowly averted bond payment default by major developer Country Garden Holdings Co., has touched off a fresh wave of uncertainty. Country Garden posted a $6.7B loss in the first half of 2023, Reuters reported.

Bank of America surveyed 222 fund managers with $616B in assets under management during the first week of September.

None of the fund managers surveyed expected a stronger Chinese economy over the next 12 months; 78% said they expected that outcome in February.

Despite the risks posed by real estate around the globe, two-thirds of the fund managers said they expect a soft landing for the global economy, 21% expect a hard landing and 11% expect no landing.

The most significant shift in investments by the managers over the last month has been away from emerging markets, MarketWatch reported.

The Chinese real estate market has been ailing since some of its largest players have started to be weighed down by massive debt. Development giant China Evergrande Group defaulted on loans and lost $81B in 2021 and 2022 combined. Other major Chinese developers, such as Sunac China Holdings, have also defaulted.