Categorized | International

Chinese Builders Not Likely to be Paid On Time

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The restrictions put in place by the Chinese government to control housing prices are starting to be felt by various industries now within the country. As developers struggle with reduced cash flow, and a tightened credit market, many now have no choice but to send late payments to their builders.

With payments from developers being delayed, many construction companies are now facing their own struggles. With payments due coming in far later than expected, many construction companies simply do not the readily accessible funds needed to start on new projects. As their ability to pay on time continues to dwindle, many developers are now asking builders to hold off on certain projects, as they do not have the money to finance them.

Some developers have decided to completely halt any kind of land purchases in the current market. As such, construction companies are taking less jobs, and bringing in less revenue.

The Chinese government had initially established the current property restrictions in an effort to prevent any chance of a housing bubble forming and then bursting. However, their actions have essentially created, and burst the bubble that they were trying to avoid. Home prices are down, and industries within the country and across the globe are feeling the negative effects.

China’s government has yet to acknowledge exactly when they plan to put an end to the restrictions. With that said, many industries hope that some changes will come within the next six months, as the price drops that have resulted from the policies have caused a great deal of damage to the world’s economy as a whole.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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