China's real estate sector: How big is the crisis?

Since the introduction of the so-called three red lines and the tightening of the regulation on corporate borrowing rules, some highly indebted real estate companies have run into difficulties. There is a concern that these companies could go bankrupt. Such a development would have negative effects on China's financial market and potentially global financial markets. Due to various factors, this scenario does not seem very likely. However, a broader, far-reaching real estate crisis harbors the risk of significantly dampening China’s economic growth and thus also having a negative impact on the global economy.