A mortgage boycott led by hundreds of thousands of middle-class Chinese citizens has become a five-alarm inferno for the authorities in China, a nation that only tolerates limited doses of protest and that is dependent on property as its primary engine of economic development.
It all started with a letter that was 590 words long and was written by irate buyers of the half-built Dynasty Mansion project in Jingdezhen, Jiangxi province. These buyers were upset that their requests for China Evergrande Group to finish the homes that they had been paying for for a long time had been ignored. If work doesn’t start up again by the 20th of October, they stated that “all homeowners with outstanding mortgage loans would cease paying.”
The ultimatum quickly spread over social media platforms such as WeChat and Douyin, becoming a call to action for individuals who have been affected by the fast collapsing housing bubble in China. Within a matter of days, the letter served as a model for demonstrations all throughout China, from Shanghai to Beijing, Shenzhen to Zhengzhou, and everywhere in between. Homeowners clipped and pasted passages from it into their own protest manifestos.
Within a period of four weeks, more than 320 projects in around 100 locations were confronted with comparable demonstrations, unsettling markets and compelling authorities to corral banks and developers in order to calm the turmoil.
The buyer was referring to the incident that occurred in the building that was undergoing construction. We are hoping that they will accept responsibility for it.
A great deal more has been accomplished by the demonstrators. Their opinions have been heard at the highest position since maintaining social harmony is an absolute need in the run-up to this year’s Communist Party Congress. The Politburo issued a summons to local authorities last week, asking them to “guarantee the completion” of housing projects, while state-owned banks are being pressured to provide financing for the construction work.
Censors have concurrently intervened in an effort to put an end to opposition by erasing postings, silencing protestors, and prohibiting connections to document-sharing websites. However, the extent of the support and the speed with which it spread demonstrates that the Chinese people are not hesitant to band together on a national scale, particularly when the safety of their cherished homes is at risk.
According to Christian Goebel, a professor at the University of Vienna who studies the topic and has conducted research on it, a coordinated boycott of this scale has never taken place in China before. This is despite the fact that real estate has been the most common cause of protests in recent years.
China analyst Bill Bishop made this observation in a recent newsletter: “The security services must be quite worried about how swiftly this movement expanded, not just inside cities but throughout the nation.” “Organizing over many geographic areas is the kind of thing that gives the government nightmares.”
After each and every previous attempt to have construction done had been unsuccessful, it was a last option for the approximately one hundred purchasers who signed that initial letter, which was replete with red fingerprint stamps. Even though the letter was posted on June 30, which caused the protest to burst over social media, the fury of the homeowners had been building up for months.
In addition, according to persons with knowledge of the matter, China intends to establish a fund backed by the central bank to finance construction. A fax sent to the People’s Bank of China requesting comment was not immediately met with a response.
According to Goebel, who was speaking in Vienna, the boycott is evidence that “something is fundamentally wrong with China’s real estate business.” “I believe that in order for the government to effectively teach a lesson, they will most likely go after the businesses rather than the homes.”
However, it is yet unknown whether or not all of the money that was requested would be provided, as well as how quickly the units will be completed. Homeowners who have been through it all, such as Peter, who purchased an apartment in Zhengzhou, Henan province, for 2 million yuan ($296,000) in May after taking out a loan from his parents and saving for years, want it to be over.
According to what he had to say, “The developer has caused us a significant amount of pain, and a lot of people are sad.” “I simply want to get my place.”