TIANJIN, China- At a Country Garden residential complex on the outskirts of Tianjin, a northern Chinese metropolis, construction activities have come to a near standstill, with only a few workers aimlessly wandering around the almost empty site.

One laborer, Wang, aged 50, mentioned that they haven't received their wages since Chinese New Year, causing considerable concern among the workers. Another worker named Wei, also in his 50s, shared the pressure he's facing, having received just a one-time living stipend of 4,500 yuan ($618) this year.

These two sites in Tianjin, both managed by Country Garden, the nation's leading developer in terms of sales volume until recently, are emblematic of the broader crisis looming over the company, which is grappling with substantial debt issues that could potentially affect the wider Chinese economy.

Construction has either significantly slowed or completely halted at these locations, as evidenced by the unfinished apartment blocks, dormant cranes, and skeletal high-rises shrouded in scaffolding. Workers residing in on-site dorms have expressed frustration over months of unpaid wages.

The ongoing turmoil at Country Garden, once considered a financially stable property developer, serves as a stark indicator of the shifting fortunes in the industry. This situation has exacerbated China's real estate debt crisis, a sector that makes up about a quarter of the world's second-largest economy. This crisis is unfolding against a backdrop of a sluggish housing market and subdued consumer spending.

Amid these challenges, a representative from Country Garden's Yunhe Shangyuan project has claimed that all "registered employees" are receiving their pay. Meanwhile, at the Yunjing Huating site, the government intervened in June, suspending construction due to management issues. However, the project has since passed inspection, and work is set to resume next week, with no expected delays in reaching the targeted completion date of October 2024. Some workers at this site are not directly employed by Country Garden but rather by its contractor, Shenyang Tengyue Construction. This contractor has reportedly pledged to pay the workers' wages by the end of the current month. However, attempts to contact Shenyang Tengyue Construction for comment have been unsuccessful.

The housing ministry has refrained from commenting on questions raised by Reuters regarding the broader construction halt in the property sector and the specific situation at Country Garden.

Country Garden, a prominent property developer, is facing mounting challenges, with nearly one million homes awaiting completion, according to estimates from Nomura.

However, the company hasn't publicly acknowledged whether any of its projects have halted due to financial constraints.

In an August 10th filing, Country Garden pledged to do whatever it takes to ensure apartment deliveries and maintain project operations nationwide. Historically, the company has thrived by rapidly selling many units with slim profit margins, emphasizing a "five-star living" experience in less popular, smaller cities.

In Tianjin, where Country Garden has about a dozen projects, most have been completed, but some construction slowdowns have been noted. Such shifts in construction pace are not unique to Country Garden; it's a common practice in China based on sales rates.

Confidence in the real estate sector wavered last year when Chinese homebuyers threatened to stop repaying mortgages. Developers had paused building pre-sold housing projects due to financial constraints and COVID-19 restrictions.

While China's real estate market showed some recovery in Q1 2023, transaction volumes have since declined, leaving many city housing markets in a "depressed" state. Reduced income has impacted homebuyers' choices and affordability, adding complexity to the situation.