An Anhui real estate project has been halted for three years, with the developer defaulting on construction payments and counter-suing the financing construction company!

Hefei Xinqiang Airport International Town is a large-scale integrated development project that blends industrial and residential use, located within the core area of the Hefei Airport Economy Demonstration Zone. In 2023, the residential project of the developer, Hefei Overseas Chinese Industrial Development Co., Ltd. (hereinafter referred to as “Overseas Chinese City”), was once suspended. In early 2026, the project planned to restart; however, before construction could begin, Overseas Chinese City sued the contractor that was owed project payments for overdue work to court.

Hefei Overseas Chinese City Airport International Town is located in the core area of the Hefei Airport Economy Demonstration Zone in Anhui Province. According to official information from Hefei, the project has a total planned floor area of about 9.2 square kilometers, with a total investment of about RMB 50 billion, aiming to create an international community that integrates residences, commerce, hotels, industry, and ecological supporting facilities. At the same time, the project is also one of the key integrated industrial-and-urban development projects in Hefei.

In 2019, the project was officially launched for construction by the Overseas Chinese City Group. Public information shows that Overseas Chinese City Group Co., Ltd. is a large state-owned central enterprise directly managed by the State-owned Assets Supervision and Administration Commission of the State Council. To develop Airport International Town, the investment subsidiary under the Overseas Chinese City Group and Hefei Huaxing Airport Investment Co., Ltd., which is state-owned and holds a controlling stake, invested in and established Hefei Overseas Chinese Industrial Development Co., Ltd. After the project was implemented, Jiangsu Zhongxing Construction Co., Ltd. (hereinafter referred to as “Zhongxing Construction”), a construction enterprise with national Class-A top qualification, became the general contractor for one of the project’s bid sections.

“Construction officially started in July 2021. By October 2022, the project had entered the decoration and fit-out stage and was basically close to completion. The developer suddenly ordered the construction unit to stop work.” Zhao, a person in charge related to the Zhongxing Construction project, said, “After more than a year of suspension, we required Overseas Chinese City to issue a work stoppage order. At that time, Overseas Chinese City owed us about RMB 39 million in project payments.”

According to the “Work Communication Letter” issued by Overseas Chinese City on December 14, 2023, the reason for the project suspension was that, due to the overall development plan of the project, construction was temporarily put on hold; the specific resumption time would be notified.

With the project’s start time repeatedly left undecided and the project payments also never made, in October 2024 Zhongxing Construction again contacted Overseas Chinese City to negotiate the restart of work. On the 18th of that month, both parties signed a memorandum regarding the relevant matters to confirm the project amount and the start time. It mentioned that the project would resume by September 2025.

As of the end of September 2024, Zhongxing Construction had completed an estimated output value of about RMB 258 million (there was also about RMB 2 million in dispute). The two parties also agreed that after the official resumption of work, they would negotiate compensation for losses during the suspension period, and would also pay a sum of cash for the resumption. If work could not be resumed, then by the end of December 2025 they would pay RMB 30 million in project payments and partially offset it with goods.

“In the end, the project failed to resume work as scheduled. This year at the beginning, we learned that Overseas Chinese City intended to terminate the contract with us, so we once again went to negotiate with Overseas Chinese City regarding the overdue project payments and loss compensation. But Overseas Chinese City does not recognize the memorandum signed earlier and also said that we stopped work on our own accord. Moreover, without paying the overdue project payments, they要求 us to withdraw unconditionally.” Zhao said. “A three-year suspension has already caused the company significant losses. The condition of withdrawing unconditionally is definitely unreasonable.”

During the negotiations between the two sides, Overseas Chinese City filed a lawsuit with the court on the grounds that Zhongxing Construction’s alleged illegal subcontracting, withholding of wages owed to migrant workers, and unauthorized suspension of work constitute a fundamental breach of contract, and that the deterioration of its business condition has resulted in a loss of its ability to perform, requesting the court to safeguard Overseas Chinese City’s rights and interests and to terminate the contract.

Local people with knowledge in Hefei said that there are two reasons for the current situation. One is that Hefei’s planning for that plot of land has changed. The other is that Overseas Chinese City has replaced two rounds of executives, and there are different views on how to handle outstanding issues.

“What is mentioned in Overseas Chinese City’s lawsuit is fundamentally not something that happened in our project, and it doesn’t mention the reason for the suspension at all. It is a false lawsuit.” Zhao said. “We have already submitted relevant evidence to the court, and we believe the court will give us an explanation.”

In relation to this matter, on March 25, a reporter from Jinyun News called Hefei Overseas Chinese Industrial Development Co., Ltd. to learn more. A relevant person in charge of the company responded that they did not know the specifics; the company has relevant lawyers and legal affairs handling it, and then promptly hung up.

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