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China debt crunch

Developer China Aoyuan will not repay investors for $688m bonds

Company also halts payments on other offshore debt securities

A China Aoyuan project in Hong Kong.    © Reuters

HONG KONG -- Property developer China Aoyuan Group said that it will not redeem nearly $700 million in offshore bonds coming due this week and halt coupon payments on others to preserve cash and "maintain fairness among all of its creditors."

The company is one of several Guangdong Province-based developers, along with China Evergrande Group, Kaisa Group Holdings and Fantasia Holdings Group, to have fallen behind on payments to creditors over the past year as Beijing has curtailed funding access and property sales have plunged as consumers lose confidence in the ability of builders to complete purchased homes.

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