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Some Chinese state property developers stiff their suppliers, defying edicts and worsening slump
- State-backed property developers, feeling the pinch in a stagnant market, are not paying suppliers and contractors the balances they are owed
- Government has urged state firms to settle their debts, but many stall, exacerbating an already painful slide in a major economic sector
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He Huifengin Guangdong
For two years, Richard Zhang has travelled to Shenzhen every few months. It is a trip many make, usually to spend leisure time in the gleaming metropolis, built in decades and a monument to China’s rapid development.
But he is no tourist. He has travelled across Guangdong province from the capital of Guangzhou to demand a state-backed construction and development firm pay what he is owed.
He performed subcontracting work for a middle school in the city’s Bao’an district, a project that was a major government priority.
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“Construction completed in 2019, and the school started enrolment in 2021,” he said.
“But we still haven’t got the final payment. I have advanced funds [from the firm’s capital] to pay workers’ wages and other expenses.”
Chinese economic regulators have been putting heavy pressure on state-owned enterprises (SOEs) to pay their small suppliers, largely private firms, on time.
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