At an eerily quiet construction site in eastern China's Suzhou, worker Li Hongjun says property developer Evergrande's debt crisis means he will soon run out of food. Christina Xie, who works in export in the bustling southern city of Shenzhen, fears Evergrande has swallowed her life savings, APA reports citing Reuters.
The pair, united like legions of others by their connections to the vast China Evergrande Group (3333.HK), show the scale of the challenge facing the Chinese government in managing its financial woes, although economists downplay the risk of a "Lehman moment" style collapse.
Evergrande, with outstanding debts of $305 billion, recently stopped repaying some investors and suppliers and halted building work at projects across the country, setting off global alarm bells over upcoming interest payments.
Li, who says he has not been paid since August, is doing minimal maintenance among half finished apartment blocs whose outer shells hide rubble-filled interiors. Sand and concrete slabs cover a just-finished marble floor in one future home.
"In the past two days I’ve been planning to go to the government," he said. "What can I do? Soon I’ll have no food to eat. If I have no food to eat I’ll have to go to the government to eat.”
Xie put 380,000 yuan ($58,770) of savings into a wealth management product sold by Evergrande and says she did not receive a payout of 30,000 yuan due to her earlier this month.
"It's all my savings. I was planning to use it for me and my partner's old age. I worked day and night saving, now it's game over," said Xie, who was told that the wealth management product that she bought would yield 7.5% a year.
"Evergrande is one of China's biggest real estate companies ... my consultant told me the product was guaranteed."
Xie still hopes to be able to redeem her investment, one of billions of yuan in wealth management products (WMPs) sold by Evergrande, but she is not satisfied with any of the options suggested so far, which include the offer of property.
Evergrande did not immediately reply to a request for comment, but chairman Hui Ka Yan told a late-night meeting on Wednesday that the top priority is to help investors redeem their products and that home deliveries should be ensured.