A Fed interest rate hike can contribute to a Chinese real estate crash because it strengthens the US dollar, making it more expensive for Chinese companies and individuals to borrow in dollars, which can lead to a decrease in investment in Chinese real estate, particularly when combined with already existing vulnerabilities in the Chinese property market like high debt levels among developers and overinflated property prices; this can trigger a downward spiral as decreased demand further depresses prices and impacts developer solvency.
