China is stepping up its oversight of funding for Evergrande projects

China increases oversight by financing Evergrande Group's development projects. Several local governments in China have set up special accounts for the real estate projects of the heavily indebted Evergrande group to protect funds set aside for residential projects from being diverted to other purposes, a server from the media company Caixin said. Real estate giant Evergrande is on the verge of collapse. Its debts are about $ 305 billion (260 billion euros) and it did not pay interest on $ 83.5 million in dollar-denominated bonds on Thursday this week without any comment. Investors now fear that they will have to write off large losses after the 30-day tolerance period. Special accounts have been set up since the end of August in at least the eight provinces where Evergrande has the most unfinished projects, Caixin said on Sunday, citing a source close to the group's management. According to Caixin, these provinces include Anhui, Guizhou, Henan, and cities in the Pila River Delta. The purpose of setting up these special accounts is to ensure that the payments of those who paid for housing are used to complete residential projects and not for something other than, for example, the payment of creditors, Caixin said. In some southern cities, such as Zhuhai and Shenzhen, regulators as well as the Ministry of Construction and Local Development are also involved in controlling and supervising the use of funds in Evergrande projects. The Wall Street Journal reported last week that Chinese authorities had called on local governments to prepare for the potential collapse of Evergrande, urging them to prevent unrest and mitigate the negative effects on the rest of the economy.