There was a period of time when all anyone could talk about was Evergrande and how much trouble China’s real estate sector was in. Since then, the noise has died down. But, even though that’s the case, the industry’s problems haven’t gone away. In late June, a mortgage boycott kicked off with home project buyers refusing to pay mortgages until developers resume projects (many property developers often pre-sell homes before project completion). And since then, that protest has spread to over 300 projects by at least 80 property developers across 90 cities around China.
Now, according to Caixin, hundreds of contractors have joined in on the boycott, saying that they can’t and therefore won’t pay their own loans now because property developers, like Evergrande, still owe them money. Evergrande hasn’t yet commented.
“We decided to stop paying all loans and arrears and advise our peers to decline any requests to be paid on credit or commercial bill. Evergrande should be held responsible for any consequence that follows because of the chain reaction of the supply-chain crisis,” said one group of small businesses and suppliers in a letter dated July 15 sent to the property developer’s Hubei office.