The United States central bank has warned that China's ongoing property woes could elevate financial stresses in China, which could further strain global financial markets and negatively affect the United States.
In its biannual report on financial stability, the Federal reserve pointed specifically to the crisis at Evergrande, China's most indebted developer, CNN reported.
The company has sparked fears of contagion since September, upon warning that it could default on its debts of more than $300 billion. Several other real estate developers are also in trouble.
Though "Chinese authorities have introduced measures to cool down property markets," there is a risk that "financial vulnerabilities will continue to rise," the Fed noted.
The central bank warned that given the size of China's economy and financial system, and its global ties, "financial stresses in China could strain global financial markets through a deterioration of risk sentiment, pose risks to global economic growth, and affect the United States."
The stocks in Hong Kong, New York and other major markets have previously been swayed by fears of contagion from Evergrande and a slowdown in Chinese growth.
( With inputs from ANI )
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