Evergrande offers parking spaces to business partners

In the southern Chinese city of Shenzhen, protesters have gathered in front of the headquarters of the indebted real estate giant Evergrande for the third day in a row. A company representative offered the disgruntled business partners of Evergrande apartments, parking spaces or storage rooms instead of money, protesters told a reporter for the AFP news agency. "But we don't need that. Neither of us agreed," said a woman named Wang. Home buyers, suppliers and craftsmen as well as small investors fear the bankruptcy of Evergrande. In years of aggressive expansion, the group has accumulated debts equivalent to more than 260 billion euros. Evergrande warned on Tuesday that there was no guarantee that the company would be able to meet all of its financial obligations. The price on the Hong Kong Stock Exchange has fallen by almost 80 percent since the beginning of the year. The corporate bonds are sometimes only traded at a third of their nominal value. Videos of protests against the company are circulating on the Internet. As is customary in the People's Republic, many Chinese have already paid in advance for apartments that are far from finished. Cranes stand still on construction sites. Subcontractors stop working because their bills are not paid. More and more customers fear that the pre-paid apartments will never be built. After many years of booming in China's real estate market, experts are seeing "signs of a turning point". Evergrande also senses the efforts of the authorities to counter speculation and to take air out of the real estate bubble. Rents should no longer rise so rapidly. Supervisory authorities are taking action against the banks' excessive lending to real estate companies, restricting borrowing and setting upper limits - also to contain the growing risks in the financial sector as a whole. It is part of the regulation campaign of state and party leader Xi Jinping, the powerful tech corporations, online trade and financial services, gaming, driving services as well as the entertainment and education industries on a leash. "China's leader collides with economic reality," US investor George Soros describes the problem in the Financial Times. The crackdown on private companies is a huge burden on China's economy, with real estate being the "most vulnerable" sector.