China Evergrande Group, once the country’s top-selling property developer, has unraveled in slow motion over the past few years. 

The company’s financial woes became public in 2021 and eventually led to its liquidation in 2024. 

Evergrande’s ​​collapse ​has ​sparked ​fears ​of ​broader ​contagion ​in ​China’s ​real ​estate ​sector​​, which makes ​up ​around ​a ​quarter ​of ​the ​world’s ​second-largest ​​​economy.

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• Evergrande, the world’s most indebted real estate developer, faces court-ordered liquidation.

• The ​​timeline ​highlights ​​Evergrande’s ​financial ​spiral ​from ​missed ​bond ​​payments ​to ​legal ​woes​.

• Delve ​into ​the ​potential ​​consequences of ​Evergrande’s ​liquidation ​on ​the ​global ​economy ​as ​the ​real ​estate giant’s ​collapse ​sends ​shockwaves ​through ​financial ​​markets​.

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The Fall of China’s Real Estate Giant: A Timeline of Evergrande’s Debt Crisis

Evergrande Billionaire Founder Xu Jiayin’s Fortune Dwindles

In January 2021, founder Xu Jiayin was China’s richest man, worth $42 billion. 

But as Evergrande failed to pay suppliers and complete projects, Xu’s fortune dwindled. 

He sold over a billion Evergrande shares in late 2021, reducing his stake from 77% to 68%. 

As the crisis worsened, Xu’s mansions faced seizure by creditors. 

In 2023, Xu became subject to a criminal probe into suspected “crimes.”

Missed Payments Signal Evergrande’s Spiralling Debt

In September 2021, Evergrande failed to pay $131 million in offshore bond coupons, exposing the extent of its liquidity crisis.

The​​ property ​giant ​had ​amassed ​over ​$​300 ​billion ​in ​liabilities ​during ​years ​of ​uncontrolled ​borrowing​​​.

With cash flow drying up, Evergrande halted construction on hundreds of pre-sold housing projects across China in 2021. 

The ​​unfinished ​properties ​left ​​homebuyers in ​limbo ​and ​​fueled ​​social ​​unrest.

Restructuring Efforts Fail to Save Evergrande

In early 2022, Evergrande proposed converting debt into new bonds and equity instruments to offshore creditors. 

However, only 30% of creditors agreed to the terms.

Evergrande ​also ​explored ​selling ​assets, ​forming ​new ​​partnerships​, and listing ​​its electric ​vehicle ​​​​unit. 

However, these efforts failed to raise enough capital to service debts.

Regulators Step In as Crisis Intensifies

In late 2022, Evergrande faced some challenges, which caused significant instability. 

The ​​Chinese ​authorities ​intervened ​to limit ​​the negative ​impact ​of ​this ​situation​​. 

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​They ​scrutinized ​Evergrande’s ​financial ​services ​wing ​regarding ​confiscated ​​​deposits.  

In 2023, the authorities sanctioned a state takeover of Evergrande Life Insurance. 

However, they avoided a complete bailout of the company.

A Hong Kong court ordered the company to liquidate after Evergrande missed a final debt repayment deadline in early 2024.

Evergrande’s​​ ​collapse disrupts ​China’s ​property ​sector​.​

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​The ​recent ​collapse ​of ​Evergrande, ​a ​major ​Chinese ​real ​estate ​company, ​has ​had ​far​-​reaching ​consequences ​on China’s ​​property sector​, ​estimated ​to ​be ​worth ​$50 ​​​trillion. 

As a result, as many as 28 other Chinese developers have also defaulted on their debts. 

This ​​has ​led ​to a ​​sharp decline ​in ​property ​sales and ​prices​, ​causing ​dissatisfaction ​and ​protests ​among ​homebuyers​.

Moreover, the ​​unrest ​has hurt ​China’s ​​economic ​growth, ​which ​is ​highly ​dependent ​on the ​​property sector. 

The Chinese government’s emphasis on “common prosperity” over uncontrolled capitalism is also reflected in Evergrande’s downfall. 

The ​company’s ​​bankruptcy serves ​as ​​a warning ​about ​the ​limitations ​of ​China’s ​market-oriented ​economy ​that relies ​heavily ​on ​debt-fueled ​private ​​​enterprises.

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