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Buildings across China are being abandoned half-finished as developers struggle with slumping demand and dwindling liquidity. (Photo by Yusuke Hinata)
Market Spotlight

Loan woes: China's troubled property market hits banks

Spate of profit warnings reveals extent of risk to broader financial system

KENJI KAWASE, Nikkei Asia chief business news correspondent | China

HONG KONG -- Troubling news continues to flow from China's property market as a series of mainland developers report sharp slowdowns and even reversals from last year's robust first-half profits before the current crisis unfolded. As the government struggles to shore up the sector, the pain is starting to reveal in the banks' loan books, with potential implications for the health of the overall financial system.

Ronshine China Holdings, a midsize developer listed in Hong Kong, warned on Tuesday that its net loss for the first six months would be between 4.3 billion and 4.8 billion yuan ($627 million and $700 million), a nosedive from its 684.5 million yuan profit a year ago.

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