By Laurie Chen
TIANJIN, China (Reuters) – In the unfinished Country Garden residential complex on the outskirts of the northern Chinese metropolis of Tianjin, the structure has been reduced to a dull roar and a few idle walks across a nearly empty site.
“We haven’t been paid since Chinese New Year (in January). We are all worried,” said an employee surnamed Wang, 50, who said he stopped running on the Yunhe Shangyuan last week.
The sprawling complex is one of two projects visited by Reuters on Friday in Tianjin, a port city of 14 million people about 135 kilometers (84 miles) southeast of Beijing. This year, now mired in a debt crisis that threatens to affect the economy as a whole.
Construction had stopped or stopped altogether at both sites: the larger with a few rows of unfinished five-story buildings and the other with lifeless cranes and thick green scaffolding suspended over skeletal skyscrapers. Workers and dormitories at the sites complained of months without pay.
“I’m under a lot of pressure,” said Wei, a worker at the Yunhe Shanghai plant, also in his 50s, adding that he had earned only a one-time allowance of 4,500 yuan ($618).
“I have a wife and son who are about to go back to school, plus elderly parents. . . Workers can’t live with it. “
Country Garden, once one of the most financially powerful developers, is now an indicator of how the cycle is turning out for developers.
Its currency problems have deepened the debt crisis in China’s real estate sector, which accounts for about a quarter of the world’s second-largest economy, and lately it is losing steam amid a housing crisis and weak customer spending.
A representative of Country Garden’s Yunhe Shangyuan assignment said in a message on Wechat that all of its “registered employees” were paid.
At the Yunjing Huating site, the government in June ordered the suspension of structural paints to control problems, a representative of the task told Reuters in a separate statement. Since then, the paintings have effectively passed inspection and the paintings are expected to resume next week, the source said, adding that the suspension would not affect the intended deadline of October 2024.
Some employees are not hired through the developer, Yunjing Huating’s representative said, but through his contractor, who “promised to pay staff salaries until the end of this month. “
The project’s contractor, Shenyang Tengyue Construction, did not respond to calls from Reuters or emailed comments.
The Housing Ministry commented on Reuters’ questions about the shutdown of the structure in the real estate sector in general and Country Garden in particular.
UNFINISHED HOUSES
Country Garden has about a million homes to finish, according to estimates by Japanese investment bank Nomura. He has publicly stated whether any of his projects were halted due to currency restrictions.
In an Aug. 10 exchange filing, Country Garden said it would “spare no effort for the delivery” of the apartments and would “operate projects across the country” to meet its commitment to homebuyers.
Country Garden built its good fortune by temporarily promoting a giant amount of low-margin sets and promising “five-star living” in smaller, less popular cities.
Tianjin has about a dozen Country Garden projects, most of which are completed and delivered, Gao Fei, head of investment advisory at Centaline Property Agency’s Tianjin branch.
Gao said halted structural projects were “relatively rare” in the city, accounting for about a dozen sites out of the three hundred for sale, but “in fact, there are projects whose progress has slowed. “
“In China, this is not an unusual phenomenon because now all developers accelerate the structure according to the sales rate. . . so once sales slow down, the structure also slows down,” Gao told Reuters.
Confidence in the sector was hit hard last year after many Chinese buyers threatened to avoid paying their mortgages, as developers prevented the construction of pre-sale housing projects due to lack of liquidity and strict COVID-19 restrictions.
China’s real estate market recovered in the first quarter of 2023, but transaction volumes have declined since then, and most urban real estate markets remain in a “depressed” state, Gao said.
“We have found that many homebuyers are affected by a lack of income, and their potential options for buying a home and what in turn may be affected. “
(Report via Laurie Chen in Tianjin; Additional reporting through Clare Jim in Hong Kong; Edited through Sumeet Chatterjee and Sonali Paul)
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