China is dead meat. It's not just Evergrande, but the entire RE sector, where ordinary Chinese have their life savings. They thought what people always think…this time it's different…everybody is making money in search of the greater fool….my family and friends will call me a failure nutjob if I don't go for it too. So by and large they all did so. Now there are no greater fools left. Entire RE sector is collapsing.
Their Ponzi allowed for companies to just write promissory notes, off book. Unbelievable, but they did so. I mean, why even pretend to have books. So Evergrande, for example, has been paying their vendors for some time, with said commercial paper. A bustling secondary market exists for that paper. So if a company got a note that said, "We owe you a million, and you will get it a year from now, the company could turn around and dump the note on the secondary market for a discount of say 5%. Then they could turn around and pay their staff and their own sub vendors with the remaining $950,000.
Meanwhile, those other companies were also writing their own promissory notes for this and that. With a company the size of Evergrande (not to mention all the others, such as Kaisa), many of the vendors dealt only with the larger company. Their entire income stream was dependent on that one company. Obviously they are dead meat if that one company can't pay its vendors any more, with it visibly being a near certainty that they never will do so.
Evergrande is now run by the CCP through what they call a Risk Management Committee. What they are likely doing is stalling while they (CCP) cherry picks the remaining assets and transfers the good ones to other CCP entities. After them, first in line is Chinese investors, overseas barbarians pound sand. Evergrande ignored those overseas people (who have lawyered up) until about a week ago, when they actually trotted out a buck toothed Chinaman to say in effect, "We need another 6 months before we will submit a PRELIMINARY plan to deal with what we owe you." In other words, get fucked, you will get nothing, ever.