‘Suppliers are being dragged to death,’ and China’s too-big-to-fail property titans are only the beginning of the country’s real estate disaster.

Bill Ye, owner of a small firm, believes the real estate market in China was doomed even before Country Garden reported total losses of up to 55 billion yuan ($7.6 billion) in the first half of this year.
He warned that the news this month might have a terrible effect on the market and on the ability of China’s large developers to make loan repayments to suppliers like himself, who are experiencing a liquidity crunch due to the country’s property crisis.

The owner of a tiny piling firm claims he has been chasing the world’s most indebted property developer, China Evergrande Group, for almost 200 million yuan for the last two years. Meanwhile, his own underpaid employees, investors, and suppliers are demanding the tens of millions that are rightfully theirs, demonstrating how the problem has spread across the business.

It may even become worse. It’s just one thing after another, he informed his buddies, seeking their guidance.

Not very long ago, everything was wonderful. Ye, now in his early forties, founded the piling firm in southern China in 2010 and rode the wave of the country’s post-financial-crisis building boom, when the government prioritized spending heavily on infrastructure to stimulate the economy. Piling is a method used to create sturdy, deep foundations for structures of all kinds.

Local governments, developers, suppliers, and purchasers all participated in the era’s frenzied land grab, building boom, and real estate market. Ye’s future was looking particularly bright when he formed a deal with the real estate powerhouse Evergrande in 2017.