[Epoch Times September 18, 2021](Epoch Times reporter Liu Yi comprehensive report) Evergrande Group is in deep financial crisis, many small and medium-sized enterprises are also involved in it, and even some companies are in desperation.
According to a report by Reuters on September 17, Wu Lei, 35, runs a small construction company in Central China. The company has accepted China Evergrande’s payment in commercial paper (commercial bill) for the past two years. Large commercial votes may be in vain, and Wu Lei’s company is also in trouble and is on the verge of survival.
Wu Lei said that because Evergrande did not pay him, he could not settle the payment to the supplier. “Now the supplier sues me and the court has frozen my property. I have sold the car. I still have employees waiting for me to pay. salary.”
Wu Lei’s Evergrande commercial paper has 500,000 yuan overdue and has not been redeemed, and another 2 million yuan commercial paper will expire in March next year. Wu Lei said that he would go back to his hometown of Kaifeng, Henan to file a lawsuit, but he was worried that it might take several months to resolve.
The boss of a small marketing and consulting company in a poverty-stricken county in Guizhou Province said that he had accepted Evergrande’s commercial paper from a client and was waiting for 1.5 million yuan in payment. It has now been overdue for two months.
According to reports, there were about a hundred people protesting at Evergrande’s Shenzhen headquarters on September 13, but by the 16th there were only more than 20 people left. Many people became less and less hopeful, or the entanglement was gradually exhausted and persisted. Can’t go down.
A shop owner from Jiangsu said: “I can only sleep on the streets and eat whatever I have. Even if I want to leave Shenzhen, I have no money to go.”
In the mainland, real estate developers like to use commercial bills, because commercial bills will not be counted as interest-bearing debt. Developers issue invoices for contractors and material suppliers, and generally promise to pay after one year.
Another report from Reuters on the 17th said that at present, Evergrande, which is heavily indebted, is on the line of life and death. Some bankers said that Evergrande is likely to be overdue in repayment, and thus enter a state of indecision. The authorities will intervene and sell some of its assets, but the situation can easily become a mess.
Michael Pettis, a non-resident senior researcher at the Tsinghua-Carnegie Center for Global Policy, believes: “The situation may only get worse before the regulators step in and reliably and comprehensively address the risk of bankruptcy.” Some experienced The emerging market crisis observers also believe that there will be more troubles in the future.
The report said that since May this year, China Evergrande’s funding problems have been snowballing. With 2 trillion yuan (US$305 billion) in debt, Evergrande’s resources continue to shrink, and its stock and bond prices have fallen by nearly 80%. Next week, there will be US$80 million in bonds that need to pay interest.
Evergrande’s wealth management product, Evergrande Wealth, expired on September 8, causing investor panic. Starting from the 10th, investors from all over the mainland have visited Evergrande’s Shenzhen headquarters as well as Chongqing, Chengdu, Xi’an, Mianyang, Handan, etc. The branch company defends rights and recovers investment funds. Rights defenders were arrested.
Editor in charge: Lin Congwen#
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