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As China Evergrande’s Debt Crisis Deepens, Unpaid Small Business Owners Speak of Despair
Reuters via Epoch Times ^ | 09/16/2021

Posted on 09/16/2021 8:59:49 PM PDT by SeekAndFind

SHENZHEN, China—Wu Lei says his small construction company in central China has accepted commercial paper from property developer Evergrande as payment for two years but with that paper’s value now in doubt, his firm is on the verge of collapse.

China Evergrande Group, saddled with more than $300 billion in total liabilities equivalent to 2 percent of China’s GDP, is in the throes of a liquidity crisis that has it scrambling to raise funds to pay its many lenders and suppliers.

Wu, 35, was one of around a hundred protesters who descended on the headquarters of the country’s No. 2 real estate developer in Shenzhen this week desperately seeking assurances of payment.

“We were working for Evergrande, so our suppliers trusted us with the materials without us paying upfront. Now they’re suing me, courts have frozen my property and I’ve sold my car. And I still have employees who need to be paid,” he said.

The plight of Wu, and many others like him, has thrown a spotlight on the extensive use of commercial paper in China’s property sector. Developers favor it as they prefer to not pay upfront and because it doesn’t count as interest-bearing debt. The paper promises contractors and suppliers payment on a future fixed date, usually within one year.

Owed 500,000 yuan ($78,000) with another 2 million yuan due in March, Wu has now gone back to his hometown of Kaifeng in Henan province to pursue his claims in court but is worried it may take months to settle.

Evergrande says it is working hard to repay investors in its wealth management products and is in talks with banks to roll over loans, but has not mentioned smaller suppliers and contractors. Financial markets, meanwhile, have priced in likely defaults on its bond payments


(Excerpt) Read more at theepochtimes.com ...


TOPICS: Business/Economy; Culture/Society; Foreign Affairs; News/Current Events
KEYWORDS: chat; chatforum; china; communism; debtcrisis; evergrande; redchina; smallbusiness

1 posted on 09/16/2021 8:59:49 PM PDT by SeekAndFind
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To: SeekAndFind

Seen this movie.


2 posted on 09/16/2021 9:22:48 PM PDT by Kozak (The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. TV)
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To: Kozak

RE: Seen this movie.

Yes, many times here in the USA. But I’d like to see this sequel played out in China.


3 posted on 09/16/2021 9:25:13 PM PDT by SeekAndFind
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To: SeekAndFind

EG bond payment due on Monday... brace yourselves.


4 posted on 09/16/2021 9:35:50 PM PDT by jimmygrace
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To: SeekAndFind

just one of the bigger scams in a country where running scams is a way of life


5 posted on 09/17/2021 4:28:44 AM PDT by PIF (They came for me and mine ... now its your turn)
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