China’s local authorities take a hard look at Evergrande’s projects to ring fence any collapse from hurting their jurisdictions
- A community in Guangzhou Huangpu district ceases Evergrande’s contract for local shantytown renovation project
- At least nine provinces demand Evergrande affiliates to transfer project revenue to government-managed bank account to avoid the funds being used for other purposes or businesses
Urban reconstruction forms a crucial part of the public works and infrastructure projects under way in China as the world’s most populous nation tries to keep the economy humming to keep the labour force employed and sustain domestic consumption, while the global coronavirus pandemic has decimated economies around the world. China has 53,988 of these shanty town works projects in 2021, according to government data.
Evergrande’s woes don’t end there. The district housing regulator of Nansha in Guangzhou has instructed the developer’s local sales office to put all sales proceeds in escrow under the local authority’s management to protect the interest of homebuyers and ensure the completion of the project, according to a September 22 notice seen by South China Morning Post. Officials at the housing authority declined to comment. Authorities at the Fusui county of Chongzuo city in Guangxi, and the Jiangjin district in Chongqing, did the same.
Other local authorities across the country are resorting to various measures to protect the interest of their communities, as they are anxious to ensure stability and a protest-free period during the ruling Communist Party’s centenary. The authorities of at least nine provinces and regions across China had put the management of Evergrande’s housing projects under some kind of state management, Caixin reported earlier, citing an unnamed person close to Evergrande’s management. Spokespeople at the developer did not respond to requests to comment.
At office and apartment building Evergrande Junrui in Huaqiang North area in Shenzhen where Evergrande is based, a police officer was sitting at the door of the sales office for the project that’s under construction.
The building is wrapping up its top, and the units will be delivered on time by the end of 2023 according to sales, as the local government is having close scrutiny on the project to guarantee people’s livelihood related functions accomplished. The project, whose units open for normal homebuyers were sold out earlier on big discounts - as high as 14 per cent cheaper than original price, has a post office and apartments for talents who meet certain criteria of the local government.