The trial of Xu Jiayin, once China’s richest man and the architect of the world’s most indebted property developer, marks the definitive end of an era. Standing before the Shenzhen Intermediate People's Court, the 67-year-old founder of Evergrande Group faced a litany of charges including fraudulent issuance of securities, illegal fundraising, and bribery. His public admission of guilt signals more than just a personal downfall; it represents the Chinese state’s transition from treating property defaults as civil disputes to matters of severe criminal liability.
Evergrande’s trajectory was defined by an obsessive pursuit of scale, a psychological byproduct of Xu’s upbringing in extreme poverty in rural Henan. After a decade in the state-owned steel industry, Xu brought a heavy-industry logic of volume and momentum to the nascent real estate market in 1990s Guangzhou. His strategy was deceptively simple: acquire land cheaply, build rapidly, and sell at high volume to ensure a constant flow of cash, regardless of profit margins.
This high-leverage machine nearly collapsed during the 2008 financial crisis, only to be saved by a critical injection of capital from Hong Kong tycoons. Rather than tempering his ambitions, the rescue emboldened Xu, who proceeded to list Evergrande in Hong Kong in 2009 and embarked on a decade of unbridled expansion. By 2016, Evergrande was China’s top-selling developer, and Xu’s personal wealth reached heights symbolized by his infamous Hermes belt and ownership of Asia’s most successful football club.
Behind the facade of success lay a labyrinth of debt and diversification that lacked economic logic. Billions were poured into electric vehicles that were never produced and spring water ventures that bled cash, primarily to maintain a narrative of growth for creditors. By the time regulators introduced the 'Three Red Lines' in 2020 to curb property sector leverage, Evergrande was already too bloated to pivot, eventually defaulting on $300 billion in liabilities and triggering a systemic crisis.
What distinguishes Xu from other embattled property moguls, such as the heads of Country Garden or Sunac, is the perceived lack of personal sacrifice and the scale of deception. While peers injected personal funds to stabilize their firms, Xu’s core team was accused of offloading shares before the collapse, and auditors later discovered the company had inflated its revenue by over $78 billion. This breach of trust with the state and the public made a criminal conclusion inevitable, culminating in the 2024 liquidation order and his current trial.
As Evergrande is delisted and its assets dismantled, the case stands as a stark warning to China’s private sector. The 'Three Highs' model—high leverage, high turnover, and high expansion—is now officially bankrupt, replaced by a state-enforced focus on financial security and social stability. Xu Jiayin’s journey from a village boy to a billionaire prisoner mirrors the volatile history of Chinese real estate, serving as a grim metaphor for the costs of unchecked growth.