BUBBLES POP: Foreign Investors Trapped in China’s Real Estate Meltdown as $140 Billion Bet Unravels Further.

Foreign money surged into China’s property sector between 2015 and 2020, as investors sought exposure to the world’s fastest-growing real estate market. The pitch was compelling:

Urbanization was still underway.

China’s middle class was expanding.

Property was the dominant savings vehicle for Chinese families.

Developers like Evergrande and Country Garden were aggressive, fast-growing, and seemingly backed by Beijing’s implicit support.

Then came a shock that few saw coming.

In 2020, Beijing imposed “Three Red Lines” financial regulations to curb developer leverage. The move triggered a liquidity crisis that imploded the property market from within.

Within two years, more than 50 major Chinese developers defaulted on debt—including Evergrande, Sunac, Country Garden, and Kaisa—wiping out billions in foreign investor holdings.

Selling real estate assets has become nearly impossible due to plunging demand, frozen financing, and opaque regulations. What makes this crisis worse is capital controls, which restrict transferring sale proceeds outside China — even if a foreign investor somehow finds a buyer.

Exit quote: “This is no longer a cyclical slowdown — it’s a systemic contraction.”

Well, yes — Beijing encouraged a housing development bubble in a country with a shrinking population.

Actually this item from a “distressed debt manager” is the real exit quote: “We didn’t invest in real estate — we invested in a political system we didn’t understand.”

That was one expensive lesson.