Big Trouble In Big China


As the collapse of Evergrande reverberates throughout the Chinese economy, pissed off retail investors have gone from storming the company’s headquarters to taking management hostage, according to the Straits Times, citing posts ‘making the rounds’ on social media.

What we know so far: over 70,000 retail investors forked over vast sums of money, in some cases their entire life savings, after the country’s second largest, ‘too big to fail’ property developer wooed them with promises of 10%+ annual returns. And while the company most likely is TBTF (as you can read in gory detail here, although Beijing has yet to make an official proclamation), these anxious retail investors may be in more of an “Alive” situation than a Sully Sullenberger landing when it comes to resolving this mess.

After accumulating some 1.97 trillion yuan (US$410 billion) in liabilities, the company – which became the country’s largest high-yield dollar bond issuer (16% of all outstanding notes) – sparked protests across the country earlier this week after announcing they were forced to delay payments on up to 40 billion yuan in wealth management products.

As we noted earlier Thursday, in an effort to appease its angry (and very soon, poor) stakeholders, Evergrande plans to let consumers and staff bid on discounted apartments this month as compensation for billions in overdue investment products as the embattled developer seeks to preserve cash, according to people familiar with the matter.

According to Bloomberg, the company will organize an online property event by Sept. 30 for investors who opt for real estate in lieu of cash. The world’s most-indebted property developer is pushing the discounted real estate as the preferred of three options for angry investors seeking repayments.

The plan, it would appear, did not go off quite as planned: in response, nearly 100 investors stormed Evergrande’s headquarters to demand their money back.


ReutersInternational investors that have been piling into China in recent years are now bracing for one of its great falls as the troubles of over-indebted property giant China Evergrande come to a head

29 Replies to “Big Trouble In Big China”

  1. Evergrande’s situation was the subject of discussion on John Batchelor’s show a few days ago.

    It seems that the blame lies with Xi Jinping. He’s a neo-Maoist, seeing himself as Mao’s ideological successor. One of his policies has been to undo many of the liberal economic policies that his predecessors put into place. Evergrande just happens to be one of the companies that got caught in that.

    Don’t be surprised if the politburo starts asking for his head.

  2. Anyone investing in China is actually investing through intermediaries in corporations under communist party control. Shareholders could never change a board. In addition to the enterprise, you are submitting to CCP direction.

  3. Excellent news.

    Who is dependent upon Evergrande’s success? not the little people running into the building… more of who else (besides the king) in the Politburo is dependent upon this Chinese success story?

    Perhaps they’re looking for someone to blame? Someone who didn’t join mainland China back in 1950ish… ?
    Good that Joe Biden knows that China’s king isn’t “that fella down under” … lol

      1. Ray

        The COLON R~4 is totally lacking in self awareness, and then claims a PHD. That had me rolling on the floor laffing. I’v worked with a lot of PHD’s, butt none as stupid as the COLON.


        1. Agitated again? Did you just see your Chicom investments going puff? No poontang for you garbage boy.

          And no, taking out garbage from offices occupied by people who have PhDs does not count as working with them.

      2. Yes, of course, you remember Angel/ray/Bart/multiple other names, you’re a Maxipad troll who activates before the election. You go into active mode for a few weeks, then declare everyone at SDA are “fake conservatives” and leave. Lather, rinse, repeat. So who are you pretending to be now? Still playing an armed Norther Ontario hermit with your dogs and your compound? Or are you back to pretending that you are an Afghanistan veteran from Alberta? Or was it an oil worker this time? Does not matter, you’re still just an inconsequential low IQ fuckup.

  4. When the chicoms put in the order to print more money, a lot more money, will the experts suddenly discover why inflation is a bad thing?

          1. Similarly, there are cities in China which have empty shopping centres. The clientele that was anticipated simply never showed up, taking their business elsewhere.

          2. There are entire city downtowns that are empty in China; offices, stores, apartments, everything.
            What is the Mandarin word for “Potemkin?”

    1. I have, in more recent years, remembered my grandmother warning me, as a child, “One day the yellow man will rule the world”. I have been so curious how she, a mother in 1940s-1970s small town rural Ontario, a pastry chef for the seasonal tourists arriving at a local hotel, married to a trapper and hunting guide, a devout Catholic, would have ever heard such a thing. Was it from the wealthy Americans arriving at the hotel, who would also hire my grandfather as a fishing guide for a week at a time? I have always remembered her saying that and I am amazed that I have slowly watch it happen in my lifetime.

    2. China first gains in trade, then loses because their products are too often so badly made as to be fraudulent. Buyers wise up after discarding barely used Chinese junk.

  5. Let them lose money. Most investors are morons who know little about business and take at face value the world of so called stock analysts that know jack shit about the true value of business and the value of opportunity. You want to believe what the banks say? What Goldman Sachs says? These are the f@ckheads that brought you the 2008 recession. Don’t believe them
    And do your own research and educate yourself. If you cannot do that you have no business being a retail investor.

    1. Yep.

      “…in some cases their entire life savings, …”

      I don’t know if I’m alarmed or comforted by the fact that basic real-estate-investing fraud is just as possible in communist China as it is in the capitalist “West.”