The speed at which officials in China have pivoted from crisis response to another round of restrictions on property developers has caught many by surprise. Developers might have hoped that they would be enlisted again to help with stimulus, as happened after the Global Financial Crisis. But they were left out. And now, with worries about the economy receding, policymakers are tightening the screws by putting new limits on how much developers can borrow. For a leadership concerned about credit risks, the motivation is clear: property developers account for all of the increase in leverage among listed firms in China over the past decade.
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