China’s junk dollar bonds have plunged to a record low as the country’s property crisis shows no sign of recovery.  

According to Bloomberg, the dollar bonds, mostly from property firms, dropped 0.3 cents on the dollar to 55.7 cents Monday, October 17. The market fell four days in a row, the longest decline streak since July.

Investors look for some housing market hints from Chinese leadership at the ongoing national congress of the Chinese Communist Party in Beijing.

In an opening speech at CCP congress on Sunday, October 16, Xi Jinping did not signal any key changes regarding real estate and the zero-Covid policy that has hit the industry. 

As the liquidity crunch hit the sector, many developers failed to deliver projects on time to homebuyers, leading to nationwide boycotts in late June. 

The Financial Times reported in August that foreign investors might lose about $130 billion on China’s real estate developers’ offshore debts amid the ongoing property crisis. 

Generally, bond investors have priced $130 billion in losses on over $200 billion in outstanding offshore bonds issued by Chinese developers. That means the bond price is traded at a discount of below nearly two-thirds of its market value.

China’s ongoing crisis has shown no sign of recovery despite rescue efforts from Beijing. The crisis is one of the major factors slowing down China’s economy, making China unable to achieve its official target of 5.5% growth for the year.

The latest data shows that new home sales by floor area during the week-long National day break dropped nearly 40% from a year ago in China’s 20 major cities.

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