China's Economic Growth Comes to a Halt

This article discusses how trouble in the real estate market has effected China and it's economy. The link to this article can be found here. (Insert link here). The real estate market accounts for a significant piece of China's GDP, and since real estate in several of China's biggest cities is down, this could spell trouble for the Chinese economy.

Many of the major real estate players in China are in debt, and they are having lots of trouble repaying the money that they owe. Xingrun, which is one of the smaller real estate developers based in the city of Ningbo, was unable to pay back more than 3.5 billion renminbi ($566 million) in debt. While defaults happen in the real estate market from time to time in China, the amount of debt this small company was in says something big about whats going on in the real estate market.

The failure of Xingrun comes a couple of weeks after China's bond market also defaulted. Many other large and small companies that are involved in real estate are starting to default as well. All of these real estate companies have had to deal with lenders who do not want to lend as much money for fear of default.

Home prices have been increasing at a slower rate. This means developers have less money, and that means they have more trouble repaying their loans. A slow down in the real estate market means that China's whole economy will suffer.