Guangzhou: protest against Evergrande, on the verge of bankruptcy
The protesters, all investors, are demanding their money back. They fear being sacrificed by the authorities to save the real estate giant. Police are on alert because of growing social malaise caused by the situation. In another blow to the company, Hainan province orders the demolition of 39 buildings.
Guangzhou (AsiaNews) – A hundred people protested this morning in front of the offices of Evergrande China Group in Guangzhou.
The real estate giant, one of the largest in the world, has accumulated debts estimated at over US$ 300 billion.
The protesters, who put their money in the struggling company, now want it back; some sunk up to a million yuan (almost US$ 160,000).
Protesters fear that their investments will be sacrificed to save Evergrande from going bust, Reuters reports. The authorities may deem it "too big to fail” given the possible social fallout.
Back in the fall 2020, when the company’s financial woes came to light, investors and suppliers took to the streets to protest, not an insignificant development in an authoritarian state like China.
At that time, police moved to end the protest, ordering participants not to cause trouble.
Over the past five years, more than 80,000 Chinese bought Evergrande's stocks worth over 100 billion yuan (US$ 16 billion).
On 31 December, the company said it wanted to refund investors part of their capital (but no interest), 8,000 yuan (US$ 1,260) per month from January to March, an announcement that sparked further discontent.
Chinese authorities say they are confident that they will be able to contain the economic and financial consequences of an Evergrande bankruptcy.
Despite such reassurances, several Chinese business people told AsiaNews in recent months that there is concern in the country about the possible “systemic” risk posed by the company’s collapse.
To protect themselves against any negative effects, many companies in China are reducing their real estate investments, especially since the authorities have made it harder to get loans, investing their capital in other areas.
Concerns have grown even more after the sale of Evergrande stocks was halted yesterday on the Hong Kong Stock Exchange.
The decision followed press reports that Hainan provincial authorities ordered the group to tear down 39 buildings in 10 days due to administrative irregularities.
Evergrande employs 200,000 people and an additional 3.8 million jobs depend on its operations around the country.
China’s real estate sector and related businesses represent 30 per cent of China’s GDP, or about US$ 5 trillion dollars.
(Photo Reuters)
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19/10/2021 18:02
21/08/2023 15:15
