The letter sent by China Evergrande’s CEO Xu Jiayin to the company’s 123,276 employees has been leaked, which shows him pushing the staff to “never admit defeat and become stronger.” Jiayin wished his staff a happy mid-autumn festival, while also thanking the people who “are still fighting on the front line,” trying to get work and production back on track. The letter was first posted on Weibo by National Business Daily, a Chineee state-linked news outlet.
Referring to the troubled times the company is currently facing, Xu further wrote that Evergrande will emerge from “the darkest moment,” with help from its leaders and its employees at all levels of the organization.
Dead Duck’s Mouth
However, instead of getting people to cheer up and double their efforts towards achieving this supposed “goal,” the letter seemed to have had quite the opposite effect on social media users. One user on Weibo responded to the letter, saying “Dead Duck’s Mouth,” using a part of a longer proverb in Chinese, which is used when referring to someone is very stubborn.
Another user said that while the slogan is good, only Xu Jiayin and the company’s execs seem to be the “fastest runners.” Yet another commented that the plan “seems really difficult.” Many have even resorted to calling Xu “delusional,” and demanding the company to pay the money back.
The CEO and his executives have been called out for cheating people, and not paying salaries to its workers. Some are even demanding that Xu be jailed, asking that he “pays for all the chaos.”
Shares Skipping as Company Inches Closer to Collapse
China Evergrande on Tuesday saw shares drop by another 0.4 percent, barely a day after a huge 10 percent drop, which resulted in the S&P 500 SPX witnessing its worst session since May this year. With its stock down a whopping mind-boggling 84 percent in 2021 to date, losses have been high at the company, with the $300 billion ($305 billion, to be precise) it owes in debt stirring up concerns that it will default on interest payments. Some have started calling the situation China’s very own Lehman Brothers moment
Experts are predicting that the company might face a potential collapse should the Beijing-based Chinese government not give it a bailout. Evergrande currently owes its suppliers over $100 billion in debt, even as customers continue to wait angrily over more than 1.6 million apartments.
It is also rumored that the property giant owes thousands of its workers their paychecks. As per a report by the New York Times, Evergrande’s employees recently gathered outside its offices, demanding their paychecks and bonuses.
Ripples Throughout the Sector
It is feared that should the firm face a collapse, the effect could send long-lasting ripples through China’s economy, while also having a concerning impact on the country’s property industry. The flourishing property market has resulted in the prices of homes being too high, as the government continues to try and halt the rapid growth.
Beijing has, in recent times, put up restrictions on home sales and purchases in a bid to strengthen its hold on the real estate market. Unsurprisingly, the same happens to be one of the major reasons behind the trouble China Evergrande is currently facing. Should the company fail, however, things could become even worse, as the confidence investors and buyers had in the market nay be shaken, creating a panic.
Recently, Weibo users have been questioning what the fate of Evergrande’s half-built projects would be, seeing the large debt the firm owes.