China property woes spread, adding to national economic gloom

HONG KONG -- In the previous month, the Politburo of China's Communist Party sparked optimism among investors in the struggling real estate industry. Following their meeting in July, they made a statement that was widely seen as an indication of potential assistance for developers facing difficulties.

During the previous week, the positive sentiment vanished when Country Garden Holdings, a major Chinese real estate company in terms of earnings, announced that it had not met the deadline of August 7 for paying $22.5 million in coupon payments for two bonds denominated in US dollars. If the company does not fulfill its payment obligations within a grace period of 30 days, it will be in a state of default on these securities, which individually have a value of $500 million.