Struggling Chinese developers now face a new challenge: trust issues. Things have been bad for the sector since the Evergrande crisis last year. But a company seen as one of the few remaining pillars of strength has suddenly warned of a default. That damages what is left of investor confidence in the sector.

Zhenro Properties is the latest developer to admit it may not have enough cash to meet debt payments. The midsize mainland Chinese developer, previously valued at more than $3bn, has asked bondholders to waive any default claims on its $200mn perpetual note next week.

Zhenro shares fell 14 per cent on Monday, bringing them down 80 per cent for the month. Trading in a 2024 bond has been suspended following extreme volatility. Its dollar note fell to 25 cents on the dollar, down from 80 cents just a few weeks ago.