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China’s Economy Is Slowing, a Worrying Sign for the World

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Economic output climbed 4 percent in the last quarter of 2021, slowing from the previous quarter. Growth has faltered as home buyers and consumers become cautious.BEIJING — Construction and property sales have slumped. Small businesses have shut because of rising costs and weak sales. Debt-laden local governments are cutting the pay of civil servants.China’s economy slowed markedly in the final months of last year as government measures to limit real estate speculation hurt other sectors as well. Lockdowns and travel restrictions to contain the coronavirus also dented consumer spending. Stringent regulations on everything from internet businesses to after-school tutoring companies have set off a wave of layoffs.China’s National Bureau of Statistics said Monday that economic output from October through December was only 4 percent higher than during the same period a year earlier. That represented a further deceleration from the 4.9 percent growth in the third quarter, July through September.The world’s demand for consumer electronics, furniture and other home comforts during the pandemic has produced record-setting exports for China, preventing its growth from stalling. Over all of last year, China’s economic output was 8.1 percent higher than in 2020, the government said. But much of the growth was in the first half of last year.A port in Qingdao, in China’s eastern Shandong Province, earlier this month. China’s exports have remained strong.CHINATOPIX, via Associated PressThe snapshot of China’s economy, the main locomotive of global growth in the last few years, adds to expectations that the broader world economic outlook is beginning to dim. Making matters worse, the Omicron variant of the coronavirus is now starting to spread in China, leading to more restrictions around the country and raising fears of renewed disruption of supply chains.The slowing economy poses a dilemma for China’s leaders. The measures they have imposed to address income inequality and rein in companies are part of a long-term plan to protect the economy and national security. But officials are wary of causing short-term economic instability, particularly in a year of unusual political importance.Next month, China hosts the Winter Olympics in Beijing, which will focus an international spotlight on the country’s performance. In the fall, Xi Jinping, China’s leader, is expected to claim a third five-year term at a Communist Party congress.Mr. Xi has sought to strike an optimistic note. “We have every confidence in the future of China’s economy,” he said in a speech on Monday to a virtual session of the World Economic Forum.But with growth in his country slowing, demand slackening and debt still at near-record levels, Mr. Xi could face some of the biggest economic challenges since Deng Xiaoping began lifting the country out of its Maoist straitjacket four decades ago.“I’m afraid that the operation and development of China’s economy in the next several years may be relatively difficult,” Li Daokui, a prominent economist and Chinese government adviser, said in a speech late last month. “Looking at the five years as a whole, it may be the most difficult period since our reform and opening up 40 years ago.”China also faces the problem of a rapidly aging population, which could create an even greater burden on China’s economy and its labor force. The National Bureau of Statistics said on Monday that China’s birthrate fell sharply last year and is now barely higher than the death rate. Private Sector StrugglesAs costs for many raw materials have risen and the pandemic has prompted some consumers to stay home, millions of private businesses have crumbled, most of them small and family owned.That is a big concern because private companies are the backbone of the Chinese economy, accounting for three-fifths of output and four-fifths of urban employment.Kang Shiqing invested much of his savings nearly three years ago to open a women’s clothing store in Nanping, a river town in Fujian Province in the southeast. But when the pandemic hit a year later, the number of customers dropped drastically and never recovered.As in many countries, there has been a broad shift in China toward online shopping, which can undercut stores by using less labor and operating from inexpensive warehouses. Mr. Kang was stuck paying high rent for his store despite the pandemic. He finally closed it in June.“We can hardly survive,” he said.Another persistent difficulty for small businesses in China is the high cost of borrowing, often at double-digit interest rates from private lenders.Chinese leaders are aware of the challenges private companies face. Premier Li Keqiang has promised further cuts in taxes and fees to help the country’s many struggling small businesses.On Monday, China’s central bank made a small move to reduce interest rates, which could help reduce slightly the interest costs of the country’s heavily indebted real estate developers. The central bank pushed down by about a tenth of a percentage point its interest rate benchmarks for one-week and one-year lending.Construction StallsThe building and fitting out of new homes has represented a quarter of China’s economy. Heavy lending and widespread speculation have helped the country erect the equivalent of 140 square feet of new housing for every urban resident in the past two decades.This autumn, the sector faltered. The government wants to limit speculation and deflate a bubble that had made new homes unaffordable for young families.China Evergrande Group is only the largest and most visible of a lengthening list of real estate developers in China that have run into severe financial difficulty lately. Kaisa Group, China Aoyuan Property Group and Fantasia are among other developers that have struggled to make payments as bond investors become more wary of lending money to China’s real estate sector.An idle construction site for a China Evergrande residential project in Taiyuan, in China’s northern Shanxi Province.Gilles Sabrié for The New York TimesAs real estate companies try to conserve cash, they are starting fewer construction projects. And that has been a big problem for the economy. The price of steel reinforcing bars for the concrete in apartment towers, for example, dropped by a quarter in October and November before stabilizing at a much lower level in December.Understand the Evergrande CrisisCard 1 of 6What is Evergrande? More

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    China's GDP Growth Slows as Property and Energy Take a Toll

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    Growth of 4.9 percent shows the country’s huge industrial sector has run into trouble. But exports and services are looking strong.BEIJING — Steel mills have faced power cuts. Computer chip shortages have slowed car production. Troubled property companies have purchased less construction material. Floods have disrupted business in north-central China.It has all taken a toll on China’s economy, an essential engine for global growth.The National Bureau of Statistics announced on Monday that China’s economy increased by 4.9 percent in the third quarter, compared to the same period last year; the period was markedly slower than the 7.9 percent increase the country notched in the previous quarter. Industrial output, the mainstay of China’s growth, faltered badly, especially in September, posting its worst performance since the early days of the pandemic.Two bright spots prevented the economy from stalling. Exports remained strong. And families, particularly prosperous ones, resumed spending money on restaurant meals and other services in September, as China succeeded once again in quelling small outbreaks of the coronavirus. Retail sales were up 4.4 percent in September from a year ago.Chinese officials are showing signs of concern, although they have refrained so far from unleashing a big economic stimulus. “The current international environment uncertainties are mounting, and the domestic economic recovery is still unstable and uneven,” said Fu Linghui, the spokesman for the National Bureau of Statistics.The government’s own efforts, though, are part of the current economic challenges.In recent months, the government has unleashed a raft of measures to address income inequality and tame businesses, in part with the goal of protecting the health of the economy. But those efforts, including penalizing tech companies and discouraging real estate speculation, have also weighed on growth in the current quarter.The government had also imposed limits on energy use as a part of a broader response to climate change concerns. Now, the power shortages are hurting industry, and the country is rushing to burn more coal.“The economy is sluggish,” said Yang Qingjun, the owner of a corner grocery store in an aging industrial neighborhood of shoe factories in Dongguan, near Hong Kong. Power cuts have prompted nearby factories to reduce operations and eliminate overtime pay. Local workers are living more frugally.“Money is hard to earn,” Mr. Yang said. Trying to Solve the Real Estate QuestionUrbanization was once a great engine of growth for China. The country built spacious apartments in modern high-rises for hundreds of millions of people, with China producing as much steel and cement as the rest of the world output combined, if not more.Now, real estate — in particular, the debt that developers and home buyers amassed — is a major threat to growth. The country’s biggest developer, China Evergrande Group, faces a serious cash shortage that is already rippling through the economy.Construction has ground to a halt at some of the company’s 800 projects as suppliers wait to be paid. Several smaller developers have had to scramble to meet bond payments.This could create a vicious cycle for the housing market. The worry is that developers may dump large numbers of unsold apartments on the market, keeping home buyers away as they watch to see how far prices may fall.“Some developers have encountered certain difficulties, which may further affect the mood and confidence of buyers, causing everyone to postpone buying a house,” said Ning Zhang, a senior economist at UBS.The fate of Evergrande has broader import for the long-term health of the economy.Officials want to send a message that bond buyers and other investors should be more wary about lending money to debt-laden companies like Evergrande and that they should not assume that the government will always be there to bail them out. But the authorities also need to make sure that suppliers, builders, home buyers and other groups are not badly burned financially.These groups “will get made more whole than the bondholders, that’s for sure,” predicted David Yu, a finance professor at the Shanghai campus of New York University.Addressing Difficulties in Heavy IndustryAs electricity shortages have spread across eastern China in recent weeks, regulators have cut power to energy-intensive operations like chemical factories and steel mills to avoid leaving households in the dark. It has been a double whammy for industrial production, which has also been whacked by weakness in construction.Industrial production in September was up only 3.1 percent from a year earlier, the lowest since March of last year, when the city of Wuhan was still under lockdown because of the pandemic.“The power cuts are more concerning to some extent than the Evergrande crisis,” said Sara Hsu, a visiting fellow at Fudan University in Shanghai.Power lines in Dongguan, China. The government has imposed limits on energy use, as a part of a broader response to climate change concerns. Gilles Sabrié for The New York TimesThe Energy Bureau in Zhejiang Province, a heavily industrialized region of coastal China, reduced power this autumn for eight energy-intensive industries that process raw materials into industrial materials like steel, cement and chemicals. Together, they consume nearly half the province’s electricity but account for only an eighth of its economic output.Turning down the power to these industries risks creating shortages in industrial materials, which could ripple through supply chains.Understand China’s New EconomyCard 1 of 6An economic reshaping. More

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    The Economy Looks Solid. But These Are the Big Risks Ahead.

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    One concern is that political leaders will mismanage things in the world’s largest and second-largest economies.The low-hanging fruit of the pandemic economic recovery has been eaten. As a result, the expansion is entering a new phase — with new risks.For months, the world economy has expanded at a torrid pace, as industries that were shut down in the pandemic reopened. While that process is hardly complete — numerous industries are still functioning below their prepandemic levels — further healing appears likely to be more gradual, and in some ways more difficult.Reopening restaurants and performance arenas is one thing. Fixing extraordinary backups in shipping networks and shortages of semiconductors, among the most vivid examples of supply shortages holding back many parts of the economy, is harder.And a range of risks, including the hard-to-predict dynamics of Covid variants, could throw this transition to a healthy post-pandemic economy off course.One looming risk is if political leaders mismanage things in the world’s largest and second-largest economies. Namely, in the United States, a standoff over raising the federal debt ceiling could bring the nation to the brink of default. And in China, the fallout from the property developer Evergrande’s financial problems is raising questions about the country’s debt-and-real-estate-fueled growth.The Organization for Economic Cooperation and Development last week projected that the world economy would grow 4.5 percent in 2022, downshifting from an expected 5.7 percent expansion in 2021. Its forecast for the United States shows an even steeper slowdown, from 6 percent growth this year to 3.9 percent next.Of course, a year of 3.9 percent G.D.P. growth would be nothing to scoff at — that would be much faster growth than the United States has experienced for most of the 21st century. But it would represent a resetting of the economy.“We’ve had liftoff, and now we’re at cruising altitude,” said Beth Ann Bovino, chief U.S. economist at S&P Global.After the global financial crisis of 2008-9, the great challenge for the recovery was a shortfall of demand. Workers and productive capacity were abundant, but there was inadequate spending in the economy to put that capacity to work. The post-reopening stage of this recovery is the opposite image.Now there is plenty of demand — thanks to pent-up savings, trillions of dollars in federal stimulus dollars, and rapidly rising wages — but companies report struggles to find enough workers and raw materials to meet that demand.Dozens of container ships are backed up at Southern California ports, waiting their turn to unload products meant to fill American store shelves through the holiday season. Automakers have had to idle plants for want of semiconductors. Builders have had a hard time obtaining windows, appliances and other key products needed to complete new homes. And restaurants have cut back hours for lack of kitchen help.These strains are, in effect, acting as a brake that slows the expansion. The question is how much, and for how long, that brake will be applied.“The kinds of growth rates we are seeing were a bounce-back from a really severe recession, so it’s no surprise that won’t continue,” said Jennifer McKeown, head of the global economics service at Capital Economics. “The risk is that this becomes less about a natural cooling and more about the supply shortages that we’re seeing really starting to bite. That may mean that economic activity doesn’t continue to grow as we’re expecting it to, as instead there is a stalling of activity and price pressures starting to rise.”The problem is that the supply shortages have many causes, and it is not obvious when they will all diminish. Spending worldwide, and especially in the United States, shifted toward physical goods over services during the pandemic, more quickly than productive capacity could adjust. The Delta variant and continued spread of Covid has caused restrictions on production in some countries. And the lagged effects of production shutdowns in 2020 are still being felt.Then there are the risks that lurk in the background — the kinds of things that aren’t widely forecast to be a source of economic distress, but could unspool in unpredictable ways.Debt ceiling brinkmanship in Washington is a prime example. Senate Republicans insist that they will not vote to increase the federal debt limit, and that Democrats will have to do so themselves — while also planning to filibuster Democratic attempts to do so. Failure to reach some sort of agreement would risk a default on federal obligations, and could cause a financial crisis. For that reason, a deal in these cases has always ultimately been done — even if, as in 2011, it created a lot of uncertainty along the way.The risk here is that both sides could be so determined to stick to their stances that a miscalculation happens, like two drivers in a game of chicken who both refuse to swerve. And to those who are closest to American fiscal policymaking, that looks like a meaningful risk.“Chances of a default are still remote, and Congress will likely increase the debt ceiling. but the path to a deal is more murky than usual,” said Brian Gardner, chief Washington policy strategist at Stifel, in a research note. He added that the political game of chicken could spook markets in coming weeks.And on the other side of the Pacific Ocean, the Chinese government has its own challenge, as Evergrande struggles to make payments on $300 billion worth of debt.Real estate has played an outsize role in China’s economy for years. But few analysts expect the problems to spread far beyond Chinese borders. The Chinese banking and financial system is largely self-contained, in contrast to the deep global linkages that allowed the failure of Lehman Brothers in 2008 to trigger a global financial crisis.“Everyone’s learned a trick or two since 2008,” said Alan Ruskin, a macro strategist at Deutsche Bank Securities. “What you have here is the world’s second-largest economy, and one that has lifted all boats, could be slowing more materially than people anticipated. I think that’s the primary risk, rather than that financial interlinkages shift out on a global basis.”All of which could make for a bumpy autumn for the world economy, but which in the most likely scenarios would lead to a solid 2022. If, that is, everything goes the way the forecasters expect. More

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    Beyond Evergrande’s Troubles, a Slowing Chinese Economy

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    Investors are watching whether the property developer defaults. But in the background, the world’s No. 2 economy is flashing numerous warning signs.BEIJING — Global markets have watched anxiously as a huge and deeply indebted Chinese property company flirts with default, fearing that any collapse could ripple through the international financial system.China Evergrande Group, the developer, on Wednesday said it reached a deal that might give it some breathing room in the face of a bond payment due the next day. But that murky arrangement doesn’t address the broader threat for Beijing’s top leaders and the global economic outlook: China’s growth is slowing, and the government may have to work harder to rekindle it.Retail sales were much more weak than expected last month in China, led by slow car sales. Industrial production has slackened, particularly for large freight trucks. And developers sharply reduced new housing projects over the summer, while rushing to finish the projects they had already started.Heavy government spending on new rail lines, highways and other projects is keeping the economy afloat right now, but may not be sustainable through next year.Markets have been riveted by the idea that Evergrande could be China’s “Lehman moment,” a reference to the collapse of the Lehman Brothers investment bank back in 2008 that kicked off the global financial crisis. While many economists in China are pouring cold water over the idea of potential financial contagion, they are pointing to the broad weakness in China’s property market, a mainstay of the economy, and other long-term threats.“This is not a Lehman moment. This is too sensational,” said Xu Sitao, an economist in the Beijing office of Deloitte. “The question is next year.”With Evergrande, it isn’t entirely clear what will happen on Thursday, when bond interest payments are due. On Wednesday, it said in a vaguely worded stock market filing that it had reached an arrangement with Chinese investors to make a payment due the following day, without offering details.It did not mention an $83.5 million payment due Thursday to foreign bondholders. Bloomberg News, citing bond documents, said the company has a 30-day grace period before a missed payment becomes a default. Evergrande did not respond to questions.Chinese policymakers could conceivably step in and rescue Evergrande. But that would run contrary to their efforts to get companies to borrow less and to take some of the steam out of the property market, where apartments for purchase are increasingly unaffordable for many Chinese families in a number of markets.The stock exchange in Hong Kong on Tuesday as the Hang Seng Index dropped over concerns about Evergrande.Jerome Favre/EPA, via ShutterstockPeople familiar with Chinese economic policymaking say that big companies often carry a lot of collateral on their books, so officials believe lenders won’t get fully burned by a collapse. They also cite the tools Beijing has to unwind debts gradually and limit financial disruptions, such as its control of the banking system.Letting Evergrande collapse quickly, on the other hand, risks a broad fall in apartment prices or other potentially unforeseeable shocks to the financial system.Chinese officials have taken short-term measures to shore up confidence. The central bank announced on Wednesday morning that it had temporarily injected about $18.6 billion in credit markets, part of a broader effort in recent days to make sure that ample cash is available.Real estate sales were slowing even before the latest difficulties, in part because of Beijing’s cool-down efforts, depriving Evergrande and other property developers of the cash they need to finish other projects. Sales dropped 7.1 percent by value in July from a year earlier and 18.7 percent in August from the same month last year.Overcapacity in many industrial sectors, coupled with a faltering construction sector, have prompted economists to predict slower growth. Bank of America lowered on Tuesday its forecast for China’s economic growth next year to 5.3 percent from a previous forecast of 6.2 percent.Growth over 5 percent is still strong by most standards. But it would represent a much weaker showing than this year, which many economists project will total 8 percent or higher. It would be considerably slower than the official growth rates China has posted in recent years.Other questions hovering right now over the Chinese economy can be seen in a handful of measures that might at first glance seem to have little to do with the real estate industry, bond prices or Evergrande’s 1.6 million unfinished apartments. The measures gauge the production and sale of heavy-duty freight trucks.Construction companies and manufacturers all over the world tend to stop buying large trucks when they see trouble ahead. Alan Greenspan, the former chairman of the Federal Reserve, used to cite the strength of the freight truck manufacturing industry as one of his favorite predictors of the future health of the American economy.The China Association of Automobile Manufacturers disclosed earlier this month that heavy truck production and heavy truck sales plummeted by nearly half in August compared to the same month last year. Excluding statistical quirks caused by the timing of the Lunar New Year holiday, it was the worst performance for both heavy truck indicators since the spring of 2015, when China was struggling to emerge from a botched currency devaluation.Trucks for export at a sea port in Yantai, China, in July. Truck production and sales plummeted by nearly half in August.CHINATOPIX, via Associated PressThe nosedive in freight truck production and sales is about much more than lost economic confidence, however. It also shows how China’s policies over the past few years temporarily inflated demand and produced severe overcapacity.Stringent new standards for air pollution took effect for freight trucks manufactured beginning July 1. Stricter safety standards are also being phased in, such as a requirement that onboard software and sensors warn drivers when they start to drift out of their traffic lanes.Domestic truck manufacturers expanded their factories last year to build as many trucks as they could before the tougher rules took effect.China’s freight truck manufacturing capacity has ballooned to 1.6 million trucks a year in a market where long-term sales estimates are far fewer than a million trucks a year. Truck dealerships across China are now clogged with rows of unsold trucks.Car sales were also weak last month, adding to uncertainty about whether consumer spending will stay strong in China even as Evergrande struggles. After construction and government spending, the auto industry is one of the biggest sectors of the Chinese economy, playing nearly three times as large a role as exports to the United States.An acute shortage of computer chips has separately affected the production and sale of cars in China, muddying the picture.“The market for car sales is generally in a downturn, partly because of the chip shortage,” said Cui Dongshu, the secretary general of the China Passenger Car Association, a Beijing-based industry trade group.While China faces broad overcapacity and other worries, many economists in China still express more confidence than economists elsewhere that the country can weather its troubles. Economists in China note that the Chinese government has more ability than most to set interest rates and control large movements of money in and out of the country.“China,” said Mr. Xu, of Deloitte, “still has a lot of tools.”Keith Bradsher More

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    Evergrande Went From China’s Biggest Developer to One of Its Worst Debtors

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    Regulators want to fix the property sector’s bad habit of borrowing too much. Evergrande, with its billions of dollars in debt, may stand in the way.The company owes hundreds of billions of dollars. Its creditors are circling. Its shares have taken a beating. But if anything forces a reckoning for Evergrande, a vast real estate empire in China, it might be the nervousness of ordinary home buyers like Chen Cheng.Ms. Chen, 30, and her husband thought they had found the perfect apartment. It was part of an 18-building complex in the southern city of Guangzhou, near a good school for their daughter and a new subway station.Evergrande was asking for a deposit worth nearly one-third of the price before the property was completed. After reading headlines about the company’s financial difficulties and complaints about construction delays from recent buyers, Ms. Chen walked away.“We don’t have a lot of money,” she said. “We were really afraid this money would evaporate.”China has a special term for companies like Evergrande: “gray rhinos,” so large and so entangled in the country’s financial system that the government has an interest in their survival. A failure on the scale of Evergrande would ripple across the economy, and spell financial ruin for ordinary households.During the boom years, Evergrande was China’s biggest developer, creating economic activity that officials came to depend on while the country opened up. As more people were lifted out of poverty, home buyers put their money into property. Feeling flush and eager to expand, Evergrande borrowed money to dabble in new businesses like a soccer club, bottled water and, most recently, electric vehicles.Now Evergrande epitomizes the vulnerability of the world’s No. 2 economy. It owes more money than it can pay off, and officials in Beijing want it to slow down. Its stock price has lost three-quarters of its value in the past year, and creditors are panicking. The company has started selling off parts of its corporate empire, but to survive Evergrande needs to keep selling its apartments.The problem is that some Chinese home buyers, once attracted to Evergrande’s developments, have grown increasingly anxious about the company.On China’s internet, buyers describe waiting months or even years for their Evergrande apartments. Some have accused the company of using the pandemic as an excuse for further construction delays.Evergrande declined to comment, citing a “quiet period” ahead of a company earnings announcement.Xu Jiayin founded Evergrande in 1996, as urbanization in China was rising steeply.Paul Yeung/BloombergThe company’s problems have been building for years, but lenders, big investors and home buyers alike are treating it as though it is about to fail. By one estimate, Evergrande owes more than $300 billion. Creditors are not sure it can pay the bills. Business partners have filed lawsuits.Property in China is prone to big swings. Speculative buying propels prices to soar. Local governments then step in to cool things down, sometimes with a heavy hand. Despite the ups and downs, the residential real estate market is still the largest store of Chinese household wealth.For Xu Jiayin, Evergrande’s billionaire founder, the wild ride has mostly followed one trajectory: up.A former steel factory technician, he founded Evergrande in 1996 just as China was embarking on the gargantuan task of moving hundreds of millions of people from the countryside to cities. As property prices climbed with this urbanization, so did Mr. Xu’s wealth.After publicly listing his company in 2009, he began to expand the business into new areas. Evergrande took control of Guangzhou’s soccer club in 2010 and spent billions of dollars on foreign players. It then moved into the dairy, grain and oil businesses. At one point, it even tried pig farming.As the business grew, Mr. Xu was able to attract tens of billions of dollars in funding from foreign and domestic investors and cheap loans from Chinese banks. The success came with strong political connections. A member of China’s People’s Political Consultative Conference, an advisory body to the central government, Mr. Xu is a presence at the most important political gatherings in Beijing every year.His proximity to power also gave investors and banks the confidence they needed to keep lending to the company. Over the years when regulators have stepped in to try to curtail Evergrande’s business, they have usually eased off soon after. By 2019, Mr. Xu was one of the richest property developers in the world.Today his wealth is a little more modest, much of it tied to the company’s stock price, around $18 billion, according China’s Hurun wealth report.“In my opinion, Xi Jiayin is someone who can walk the tightrope really well,” said Rupert Hoogewerf, the founder of the Hurun Report. “He has been able to balance his debt with his growth.”The question for many observers is whether Mr. Xu can continue his careful balancing act as regulators try to shrink the sector’s spiraling debt. When China’s economy began to slow more drastically several years ago, developers like Evergrande found themselves overextended and strapped. To gin up business, they discounted apartments, undercutting the value of properties that earlier buyers paid, prompting street protests.The model of selling apartments before they were completed gave companies the cash they needed to keep operating. That was, until regulators took note of the property sector’s unruly debt, making it harder for developers like Evergrande to finish the apartments they have already sold to buyers.Evergrande took over the soccer club in Guangzhou, China, in 2010 and invested heavily in it —  including a 100,000-seat stadium that opened last year. Evergrande Group, via ReutersFearing a housing bust that would ricochet through China’s financial system, the central bank created “three red lines,” rules forcing property companies to get their debt levels down before they could borrow more money. The aim was to limit the banking sector’s exposure to the property market. But it also took away funds they could use to finish projects.To comply, Evergrande has started to sell off some of its businesses. Last week it sold stakes in its internet business. In public comments, Mr. Xu has pointed to the company’s success in paying off some foreign and domestic investors, reducing debt that incurs interest to $88 billion from $130 billion late last year.But it still has unpaid bills from acquisitions, land-use rights and contract liabilities that add up to hundreds of billions of dollars. Some lenders and business partners have taken it to court to try to freeze assets to get their money back.“On paper it doesn’t make any sense for a company like this to have so much debt. This is not normal,” said Jennifer James, an investment manager at Janus Henderson Investors who estimates that Evergrande has more than $300 billion in debt. Then there are the properties that it took payment for and still has not completed.Wesley Zhang has been waiting four years for an apartment he bought for his parents. Mr. Zhang, 33, paid a $93,000 deposit and has made 41 monthly mortgage payments of nearly $1,100. Local officials suspended the development project in 2018 but later reversed the decision, giving Evergrande the green light to start building.There are no signs of any progress or communication from Evergrande on the apartment he bought. The company is now trying to sell apartments in the complex that promise to be ready to move into by 2023.“It has a huge impact on my life,” Mr. Zhang said. To get his money back, he would have to file a lawsuit against the company to break his contract. “We also need to consider buying another apartment, but the property prices are much higher now.” More