The recovery in China’s property market, largely fueled by government stimulus, is not sustainable, says S&P Global Ratings.
"The recovery isn’t all that rosy, in fact it’s rather fragile," says S&P director of corporate ratings Cindy Huang. "It’s driven by liquidity.” And that reliance on liquidity, along with short-term debt, drove S&P to downgrade ratings on Chinese builders, Bloomberg reports.
While fragile, it’s still a recovery—Chinese property sales soared 61% in the first four months of this year as falling interest rates pushed mortgages up 25%, leading to strong sales. But, as the recovery is fueled by unsustainable methods, the question is: how long will it last? [Bloomberg]
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