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China debt crunch

Ripple effect of China real estate crisis risks bigger economic blow

Banks and governments are both on the hook for property sector's excesses

Real estate and construction make up a big share of urban jobs in China.   © Reuters

BEIJING -- China's real estate slump has sucked in both banks and provincial governments, threatening a bigger impact on the world's second-largest economy.

Defaults have soared over the past 12 months after property developers' debt-fueled growth model lurched into reverse. Including delayed payments, 99 defaults on domestic debt occurred in the year through Aug. 8, 2.2 times as many as a year earlier, according to Shanghai-based Wind Information.

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