There are very limited avenues for investment in China, especially ones which are relatively safe, real estate being clearly favoured above the rest.
Evergrande isn’t in isolation, with the Chinese Government being worried for years about the amount of leverage in it’s largest industry by GDP. So it came out with the three lines policy, which triggered a dumping of properties on the market by firms trying to reduce their debt. Property prices dropped from that, further choking indebted developers. Evergrande is representative of the Chinese real-estate market, where for years previously developers depended on ever increasing property prices which has now stopped.
So what can the average Chinese citizen do?
They can’t get their money offshore due to the capital restrictions setup which limits transferring $50k USD equivalent maximum per year.
There’s a few ways around that restriction and Crypto more recently became a popular one, with large flows of Tether in particular on the OTC desks enabling billions to get out of the country. Otherwise crypto overall offered an alternative investment outside of the real-estate market.
The Chinese government saw this and so tightened restrictions early this year as they don’t want money flight undermining an already rocky economy. This article is a good summary of that worry. https://www.bloomberg.com/news/articles/2021-04-06/china-s-epic-battle-with-capital-flows-is-more-intense-than-ever
What we are seeing now is the Chinese government just re-emphasizing this ban, to discourage capital outflow.
Even with the restrictions it won’t do much, as a far back as 2017 it was estimated that 3.5 trillion flowed out in the last decade. Now the outflows are even higher even with tighter restrictions, it’s no wonder they’re cracking down.
Edit: corrected for the money limit. And for a better run down of how the limit is avoided https://www.bloomberg.com/news/articles/2021-03-11/from-crypto-to-offshore-accounts-tactics-used-to-get-cash-out-of-china