China’s Property Distress Sours Steel Sector in Warning Sign for Economy

China’s Property Distress Sours Steel Sector in Warning Sign for Economy
Laborers work at a steel plant of Shandong Iron & Steel Group in Jinan, Shandong province, China, on July 7, 2017. Stringer/Reuters
Reuters
Updated:

BEIJING—Debt problems at a major Chinese property developer have now spilled over into a vital artery of the nation’s industrial engine—the steel sector—and started to ripple through to other critical parts of the world’s second-largest economy.

The spreading balance-sheet crisis at real estate firms is a warning for policymakers as a swing in the fortunes of the steel industry would have significant repercussions for China’s economy, with cement, glass, and household appliances all vulnerable to demand drops.