A chain of defaults involving construction companies and banks in China may have far-reaching implications beyond the country’s borders.

This is what renowned financial analyst Eldar Shamsutdinov writes on his Telegram channel:

Bank runs continue in China. Two banks, Guangzhou Bank and Zhangzhou Bank, are already facing depositor rushes. Depositors are hastening to withdraw their money as they anticipate defaults in the banking sector.

Yesterday marked the final day for Country Garden to repay its debt, but the construction holding company experienced a technical default. Prior to this, another major developer, Evergrande, had announced defaults on several of its debts.

Evergrande has 1.6 million unfinished and unoccupied apartments on its balance sheet, with an estimated total of five million customers affected.

Country Garden has issued a warning that it may default on its $200 billion worth of debts. If China cannot contain the real estate crisis, the chain reaction of cross-defaults in foreign markets could be more severe than the 2008 mortgage crisis.