In Depth: Mounting Debt Defaults Fuel Crisis in China’s Construction Industry

Firms are struggling amid unpaid bills, shrinking liquidity and the real estate slump

China’s construction industry is reeling from a wave of defaults and financial turmoil as delayed payments and rising bad debts cascade through the sector. Once fueled by a booming real estate market, construction firms are now struggling with unpaid bills and shrinking liquidity.

Xi’an Construction Engineering Group Co. Ltd., a state-owned construction company in Northwest China, became the latest victim of this crisis after defaulting on a 263-million-yuan ($37 million) bond last month after a series of credit downgrades over the previous six months.