Tremors in China’s real estate market are shaking the country’s economy, as well as the world, which has come to rely on China as a reliable engine of growth.

Major developers are faltering as they face huge losses, struggle with mountains of debt and miss payments to lenders. A long-running building boom that propelled China’s growth has come to a halt, threatening the jobs and savings of millions of households. China’s markets have tumbled and its currency has weakened as officials take action to spur growth.

Here’s what you need to know:

What’s going on with real estate and China’s economy?

For decades, China’s economy was dependent on a booming real estate sector fueled by population growth. The housing market created jobs and served as a place to store wealth for China’s growing middle class. Local governments also depended on revenue from land sales.

But the country’s population isn’t growing like it used to and years of strict Covid-19 restrictions shook Chinese consumers. The government has also cracked down on risky practices in the industry, a combination that has left real estate developers with enormous debt and more new housing units than buyers.

Home prices have slumped, denting Chinese households’ savings, and confidence, as the government tries to transition from an economy powered by state-directed investments and exports to one led by domestic consumer spending.

How bad is it?

By one estimate from Gavekal Research, unpaid bills from private Chinese developers total $390 billion, a major threat looming over the economy.

Economists have downgraded their forecasts for China’s economic growth, many to below the government’s target of about 5 percent.

Both imports and exports have fallen in recent months, and foreign investment into the country dropped more than 80 percent in the second quarter from the previous year. Consumer prices in China fell in July for the first time in two years, a sign that Chinese households were spending less.

The Hang Seng Index of stocks listed in Hong Kong entered into a bear market on Aug. 18, falling more than 20 percent from their high in January.

What companies are at the center of the crisis?

Country Garden, China’s largest real estate developer, said earlier this month that it expected to report a loss of up to $7.6 billion for the first six months of this year. The company’s share price has tanked as investors fear it could default on billions of dollars in loans.

China Evergrande, another major real estate developer, recently filed for U.S. bankruptcy as it restructures its debt. The company defaulted on $300 billion of debt in 2021, one of the first major signs that China’s real estate industry was in trouble.

The sector’s troubles are also spreading to China’s financial trust companies, which offer investments with higher returns than standard bank deposits and often invest in real estate projects.

Zhongrong International Trust, which manages about $85 billion in assets, has recently missed payments to investors. Videos circulating on social media showed a crowd of investors protesting outside the firm’s offices in Beijing, demanding the company pay them back.

What is China’s government doing about all this?

Chinese regulators started cracking down on reckless borrowing in 2020, which forced companies to reduce their debt levels before taking on more debt.

That led to the trouble at heavily indebted developers like Evergrande and Country Garden. More than 50 real estate developers in China have failed to make payments in the past three years, according to Standard & Poor’s.

The government recently outlined programs aimed at spurring spending and investment, but the details have been opaque.

China’s central bank on Monday cut its one-year loan rate, which is used for most corporate loans, but left its five-year rate, used to price mortgages, unchanged. Economists had expected more aggressive moves.

What effect could China’s troubles have on the global economy?

Over the past decade, China has been the source of more than 40 percent of global economic growth, compared with 22 percent from the United States and 9 percent from the eurozone, according to BCA Research.

A decline in consumer spending in China hurts companies that do business there, like American technology firms and European luxury goods groups. A weaker Chinese economy also means less appetite for oil, minerals and other building blocks of industry. China is one of the United States’s largest trading partners, purchasing billions of dollars of American crops and machinery each year.

That said, the reaction from global investors has been relatively muted so far. The S&P 500 recently fell for three consecutive weeks amid the signs of distress in China’s economy, but remains higher for the year, propelled by big technology firms. Investors in the United States and Europe have also been occupied with their national central banks’ next moves on interest rates as their countries face stubborn inflation.

Keith Bradsher, Peter S. Goodman, Alexandra Stevenson and Daisuke Wakabayashi contributed reporting.