China’s real estate crisis could soon go from bad to worse: China’s largest developer Country Garden is teetering on the brink of default, warning (pdf) yesterday that it expects to miss payments on its USD-denominated bonds, triggering what would be China’s largest-ever corporate debt restructuring.

Remember: The developer narrowly avoided a default last month by making interest payments on two bonds during a grace period. But with multiple coupon deadlines looming in October and November, its latest statements suggest default could be imminent.

Why this matters: The escalating crisis threatens to trigger a downturn in the Chinese economy, of which the property sector accounts for nearly 25%. And a downturn in China means more uncertainty for the global economy.

This was a big story in the global business press yesterday: Reuters | Bloomberg | Financial Times | Wall Street Journal.

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