A Chinese property giant is a $300 billion time bomb for Beijing.

For decades, the Chinese developer Evergrande Group was an embodiment of the success of the rapidly growing Chinese economy. Increasing disposable personal income fueled a growing passion for purchasing property which in turned propelled the rise of Evergrande, as well as its billionaire founder Xu Jiayin.

But ever since the Chinese government tightened rules on property companies’ borrowings last year as demand for real estate appeared to weaken, developers like Evergrande have been under greater pressure to repay the piles of debt they took on to fund their expansion across sectors.

Evergrande is a bellwether for the sector, given its gigantic footprint across the country of more than 1,000 projects. But given that it owes over $300 billion, analysts expect the company to enter restructuring, and for investors in the company’s dollar-denominated debt to take a 70% haircut. The company’s share price has fallen roughly 80% this year as investors lose confidence.

After it successfully averted a liquidity scare last year, Evergrande is now facing fresh complaints from buyers of the firm’s properties, and retail investors, who worry that it can’t deliver the projects on time, or repay its matured financial products or loans. Many investors have staged protests across China in recent days, a rare phenomenon in a country where any expression of dissent or anger is tightly controlled.

Overall, the company faces more than $300 billion in liabilities, which is roughly the equivalent of the overall public debt of Portugal. This has not only made the firm the world’s most heavily indebted developers, but also a swelling corporate headache for the Chinese Communist Party. If the company, whose business also involves a soccer team, a bottled water firm, and an electric vehicle unit, fails to complete projects or repay investors, there could be growing social unrest and serious financial risk to the Chinese economy.

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