The privately owned firm, whose rapid expansion into 280 Chinese cities had bolstered its reputation, now appears on the brink of buckling, but experts say Beijing will not allow it to collapse chaotically.
In eastern Jiangsu province anxious investors gathered on Wednesday morning outside company offices in Taizhou city, while similar protests have been reported in Anhui and unpaid workers have demanded their wages in Ezhou city, Hubei.
Concern is building among unpaid suppliers – some of whom in Shenzhen say they are owed upwards of US$1 million – as well as investors relying on returns to pay off their own loans and staff salaries.
On Wednesday morning a woman sat on the floor in front of the Shenzhen offices crying, while several officers stood guard nearby and shooed away journalists.
“They are trying to deal with their bad properties,” another investor told AFP, requesting anonymity. “These are products they are unable to sell.”
It is rare for China’s communist authorities to allow protests of any kind, especially across several cities. The country’s tightly-controlled internet was abuzz with gripes about Evergrande on Tuesday while images of the protests rattled across social media.
Experts say the unusually permissive approach could signal Beijing’s desire to show the public it is on their side while it assesses its next moves.
The giant debt mountain helped drive Evergrande’s voracious expansion, which started with a 1990s property boom and lasted until Beijing moved to trim leveraged growth in the sector by introducing curbs in 2020.
While there are dire warnings about what impact a default by Evergrande would have on the economy, experts say a disorderly implosion is not expected as Beijing would likely step in.
“An Evergrande default could damage consumer confidence if it were to affect households’ deposits for homes that have not yet been completed, but we assume the government would act to protect households’ interests, making this outcome unlikely,” ratings agency Fitch said in a note on Wednesday.
Markets from Hong Kong to New York have so far taken Evergrande’s troubles in their stride despite months of bad news about the company, including two ratings downgrades and gloomy company statements.