China property developers’ struggles make waves that threaten to swamp upstream and downstream suppliers
- Two-thirds of major listed companies in closely tied sectors such as construction reported falling first-half profits, with half swinging from profit to loss
- Cement manufacturers, design houses and furniture retailers also among firms taking on water
Lily Gao, a designer in an architectural firm in Shanghai, never thought that the news about defaulting property developers and mortgage boycotts would affect her life.
“I thought that since I did not even buy a home or invest in any of the wealth management products, those news stories were just other people’s desperate stories,” the 27-year-old said. “Apparently, I was too naive.”
Now, the distressed property market could end up costing Gao about 90,000 yuan (US$13,000).
“We were told that our bonus this year could get delayed or cancelled if the receivables cannot be settled,” the designer said with disappointment.
Losing the bonus, which usually accounts for 30 per cent of Gao’s total compensation, would force her to call off her plan to buy a car.
