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Evergrande is a poster child for property sector risks

Evergrande appears to be getting closer to a reckoning over the scale of its liabilities as regulators, banks and local governments tighten the screws. It is just the largest of many developers that have leant heavily on pre-sales and on creative accounting to circumvent rules on borrowing. The government’s priority will be to ensure that any restructuring is orderly. But a slowdown in property construction activity will be hard to avoid.

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