What's going on?

China�s latest crackdown � on its real estate industry � had investors worried on Monday, as every sector looks increasingly like a nail under its relentless regulatory hammering.

What does this mean?

China�s government has been putting all sorts of regulations in place to make it easier for homebuyers to get on the property ladder, as well as to reduce the amount of debt in the sector. But that�s put more than a few developers on the back foot � not least real estate giant Evergrande, whose $300 billion-plus in debt makes it the most indebted property company in the world. Evergrande warned just last month that these new rules could drive it to bankruptcy, and, true to form, it�s been struggling to come up with the cash to cover this week�s installment. Investors, uh, aren�t optimistic about its chances: they�ve sent the company�s shares down more than 47% in the last month (tweet this).

Why should I care?

For markets: It�s one thing after another.
It wasn�t long before investors were getting nervous that China�s clampdown would spill over into Hong Kong, which might be why a key index tracking the region�s property stocks dropped 7% on Monday. And once the dominoes started falling, they didn�t stop: Ping An � China�s biggest insurer with significant exposure to the country�s property market � saw its shares collapse more than 8% on Monday, while the prices of construction metals like copper and aluminum pulled back too.

The bigger picture: China�s Catch-22.
Property-related activities are estimated to make up 29% of the Chinese economy, so a catastrophic default of developers like Evergrande would be no small thing for the country itself. The question, then, is whether China is so adamant about getting debt levels down that it would rather take the hit to its own growth than bail those giants out. We don�t know the answer yet, but we might soon enough�