Real estate and construction account for more than a quarter of China's GDP and serve as a powerhouse for many other sectors, such as steel and furniture.
But to reduce the indebtedness of the sector, Beijing last year tightened the conditions of access to credit for real estate developers.
Evergrande, long number one in the sector, has since found itself short of cash and its financial situation has worsened considerably in recent months.
All-out and sometimes risky investments (tourism, leisure, digital, electric car ...) also explain its precarious situation.
The group's setbacks in turn lead to a crisis of confidence among potential buyers.
As a result, sales and prices of real estate are on the decline in many Chinese cities.
Evergrande is strangled by an abysmal debt of around 260 billion euros.
And he has struggled for several months to honor his interest payments and his apartment deliveries.
On November 6, the group should have paid a repayment on interest representing $ 82.5 million (73.1 million euros).
He had a one-month grace period, which ended on Tuesday.
"Prosecutions"
Since then, "no announcement has been made by the company or its creditors regarding the repayment," Fitch said Thursday.
As a result, the financial rating agency downgraded Evergrande's solidity rating by one notch, to the penultimate level of its nomenclature.
"It is the formalization of the default," commented Chen Long, an expert at the specialist firm Plenum.
"Evergrande was in default on Monday on two loans," he said.
Now "I think all the creditors are going to sue" and the group "is going to have to enter a period of restructuring".
In this context, creditors will seek to seize certain assets of the property developer, forecasts the expert.
"But I don't think they will succeed. They will have to negotiate with the company," being in a weak position given that the bulk of the assets are in mainland China.
"Risk management"
In September, the group admitted for the first time that they might not be able to honor all of their commitments.
Despite several missed deadlines, Evergrande had so far always managed to repay its creditors in extremis.
The tone changed last week, however, when Evergrande once again sounded the alarm bells on his financial capabilities.
Its founder, billionaire Xu Jiayin, was summoned in the wake of the authorities in Guangdong province (south), where the group is headquartered.
While Beijing has yet to say whether or not it intends to come to Evergrande's aid, central bank governor Yi Gang has hinted that the fate of the group will be left to the laws of the market.
"The rights and interests of creditors and shareholders will be fully respected according to their legal seniority," he said, according to statements reported by the Chinese press.
For the time being, the Chinese state has taken part in the steering of the group with the creation of a committee whose mission is to "reduce and eliminate future risks".
Some analysts believe the measure marked the start of a restructuring of the company, which will likely take years.
Scenario à la "Lehman"?
Evergrande says it employs 200,000 people and indirectly affects 3.8 million jobs in China.
Any bankruptcy would have catastrophic consequences for the Chinese economy but also on the social level, with a risk of unrest.
Most analysts, however, consider Evergrande unlikely a "Lehman Brothers" scenario because the markets have anticipated these difficulties.
The bankruptcy in 2008 of the American investment bank had precipitated the planet in its worst financial crisis since 1929.
Chinese promoter Kaisa, much smaller in size than Evergrande but one of the most indebted in China, also "defaulted" on a repayment, according to Fitch.
Kaisa should have paid a repayment of 353 million euros on loan interest on Tuesday.
The group, 27th in China in terms of turnover, warned last week that it risked finding itself in default of payment.
Kaisa has 17,000 employees.
In 2015, it was the first Chinese real estate group to be subject to a default on dollar bonds.
© 2021 AFP