Home Real Estate Fed says China’s real estate troubles could spill over to the U.S.

Fed says China’s real estate troubles could spill over to the U.S.

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Ornamental statues at China Evergrande Group’s Life in Venice real estate and tourism development in Qidong, Jiangsu province, China, on Tuesday, Sept. 21, 2021.

Qilai Shen | Bloomberg | Getty Images

BEIJING — The U.S. Federal Reserve warned Monday of potential spillover from China’s real estate troubles to the U.S. financial system.

Since this summer, highly indebted developer China Evergrande has rattled global investors as the company has attempted to avoid official default. Other Chinese developers have also struggled to repay debt, adding to concerns of wider fallout in the world’s second-largest economy — roughly a quarter of which is driven by real estate.

“Stresses in China’s real estate sector could strain the Chinese financial system, with possible spillovers to the United States,” the Federal Reserve said in its latest financial stability report, released twice a year.

The report pointed to the size of China’s economy and financial system,…

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