Beijing’s pressure on the real-estate sector is being felt far beyond

China Evergrande Group,

raising questions about how much economic pain China’s leaders are willing to stomach as they rein in yet another industry.

But economic data for August, released Wednesday, pointed to broader difficulties, with national home sales by value tumbling 19.7% year-over-year, the largest drop since April 2020. Growth in home prices and real-estate investment has slowed, while construction starts fell 3.2% in January-August, compared to a year earlier. Chinese property stocks fell Wednesday, with the Lippo Select HK & Mainland Property Index dropping 3.3% in Hong Kong.

Policy tightening is the immediate problem for Chinese developers, but the underlying issue is that they have borrowed too much over the last decade to expand, said Mark Williams, chief Asia economist at London-based research house…

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