The People’s Bank of China PBoC loosened monetary policy last year as the country experienced the slowest economic growth since the mid-1990s, amid a property price slump and weaker industrial output. The credit expansion helped fuel soaring stock market prices and also alleviate pressure on highly indebted property developers.
Guangzhou-based Evergrande Real Estate, China’s second-biggest property developer, was a major beneficiary, not least because it had racked up dollar-denominated debt during the previous two years and attracted concerned scrutiny from investors.
Listed in Hong Kong, Evergrande focuses on residential and commercial properties in tier-3 cities on the mainland, where inventories had risen as sales declined. On 29...
