Hundreds of thousands of frustrated homeowners in more than 100 cities across China are joining together and refusing to pay back loans on their unfinished properties, reports The New York Times.
Their boycott represents one of the most widespread acts of public defiance in China. Despite efforts from internet censors to quash the news, collectives of homeowners have started or threatened to boycott in 326 properties, according to a crowdsourced list. By some estimates, they could affect about $222 billion of home loans, or roughly 4 percent of outstanding mortgages.
The boycotts are also a sign of a growing economic fallout as China reckons with the impacts of its Covid restrictions. The country’s economy is on track for its slowest growth in decades. The real estate market, which drives about one-third of China’s economic activity, has proved particularly vulnerable.
Earlier in 2020, China started to crack down on excessive borrowing by developers to address concerns about an overheating property market. The move created a cash crunch, leading Evergrande and other large property developers to spiral into default.
Protests erupted last month in Henan Province when a bank froze withdrawals. The demonstration set off a violent showdown between depositors and security forces.
However, the boycotts threaten to undermine Xi Jinping’s pursuit of a third term as China’s leader.