Evergrande’s Collapse： Xu Jiayin’s Fall and the Disintegration of the Empire

Abstract:

[Evergrande’s Collapse: Xu Jiayin’s Fall and the Disintegration of the Empire] Evergrande, the former real estate giant, has been in a series of financial crises. After Xu Jiayin, the executive director and chairperson, was arrested, Evergrande’s predicament has worsened. Shares have stopped trading, executives have fled, employees have fled in large numbers, and debt has been plagued. Evergrande’s prospects are extremely bleak. A series of events not only marks the decline of a business empire, but also reflects some of the deep problems in China’s real estate industry.

Text:

Evergrande Group, a once-glorious real estate giant, is now in an unprecedented predicament. Xu Jiayin, the boss who has controlled Evergrande for many years, was taken away by the police after being suspected of illegal crimes, and Evergrande’s shares were suspended. All this seems to be the bell of the end of Evergrande, ringing throughout the real estate industry.

The debt problem is the main trigger for the Hengda crisis. Due to the continuous capital chain break and financial problems, Hengda had to resign as the chairperson of the real estate. Although it temporarily injected funds to stabilize public sentiment, Hengda still failed to solve the fundamental problem after the crisis subsided briefly. The huge debt is like the sword of Damocles hanging over the head, which eventually led to the default of Hengda’s domestic and foreign debts.

After Xu Jiayin was taken away, Evergrande seems to have lost its backbone. Faced with debts of up to 2.40 trillion yuan, Evergrande’s future is in doubt. The massive loss of employees, the turmoil of management, and the fracture of the capital chain all herald the possibility of the disintegration of the Evergrande empire. The former real estate overlord is now struggling under the attack of the market and the law.