Chinese officials are gearing for the possible default of property giant China Evergrande Group, indicating an unwillingness to bail out the company, the WSJ reported.
Sources close to the matter said the preparations are in preparation for the “possible storm,” with local-level government agencies and state-owned enterprises ordered to come in only at the last minute.
Local governments were mandated to prevent unrest and address the possible riffle effect on home buyers and its impact on the broader economy, such as limiting job losses.
Officials were also mandated to establish a group of accountants and legal experts to look into the embattled group’s finances in their respective regions and discuss the possible takeover of local projects.
Evergrande last week said it tapped financial advisors with a risk of default, with two installment payments due this week. Its financial troubles have concerned investors with the possible implications on the economy.
Representatives of the group and Chinese officials have yet to comment on the matter.
