Second only to the real estate developer with the most debt in the world Warn of potential default, The man who built it from the ground up made it public for the first time in weeks.

The billionaire founder and chairman of China Evergrande Xu Jiayan hosted a conference call in a photo on the company’s social media, trying to reassure observers that his company will complete its real estate project.

But neither Xu nor any of his senior deputies made any public comments on Tuesday’s disturbing interim results.

Instead, the details of the severe liquidity crisis faced by one of China’s most systemically important companies were detailed in the objective financial statements, followed by crazy transactions in the bond market, where Evergrande borrowed a lot from the market. funds.

Behind the scenes, Xu’s ambitions and connections helped him build a huge real estate development empire in more than 200 cities, which is vital to the future of a company that many people fear is crumbling on the brink of disaster.

Evergrande faces pressure to cut US$89 billion in debt in Beijing. Since July, it has faced a large number of problems almost every day. Pressure from lenders, Disputes with contractors And suspend its project.

The fate of the group is of urgent importance not only within the Chinese financial system but also outside the Chinese financial system. The prospect of default may affect the international market.

Like many Chinese business magnates, the life and personal wealth of the Hui reflect China’s rapid economic transformation since the 1980s.

Born in Henan Province in 1958, his mother died before his first birthday, and his father fought against Japan in the 1930s and 1940s. Chinese media reports. After working in the steel industry in the 1980s, Xu founded Evergrande in Guangzhou in 1996.

Evergrande’s New Energy Automobile Group showcases cars at the 2022 Shanghai Auto Show © Shen Qilai/Bloomberg

In the following decades, as the urban population and prices rose, the company’s residential projects emerged in various cities in China. Mr. Xu, who still owns 71% of the group’s shares, soared to US$45 billion in 2017.

At the 13th National Congress of the Communist Party of China in 2018, he paid tribute to the contribution of private enterprises to China’s economic growth. Crowned as the richest man Forbes is in the country. “For more than 30 years, Chinese private enterprises have grown from scratch,” he said, “from small to large, from weak to strong.”

Xu did not respond to a request for comment on this article.

Evergrande was listed in Hong Kong in 2009, and its share price rose 34% on the first day of listing. But in the bond market, the group quickly became synonymous with the excessive debt that some believed was related to China’s real estate boom.

According to Cercius Group, a Montreal-based consulting firm that specializes in Chinese elite politics, the Hui people have benefited from close ties with Zeng Qinghong (a politician who served as Vice President of China in the 2000s and is now retired) and his family.

The group has also expanded its shares in various businesses other than real estate. Hui has purchased a football club and established an electric car company, but has not yet released a car commercially.

In 2015, due to a law restricting foreigners from only buying new houses, the Australian government forced the sale of luxury homes worth US$31 million purchased by Xu’s Evergrande through a shell company.

But Beijing is cautious about asset bubbles and has put pressure on large developers to reduce debt in the past year.

After Evergrande’s mainland real estate subsidiary failed to go public, the group’s problems escalated. It is now eager to sell assets, including its electric car shares, in order to generate enough cash to reduce debt while completing the project.

In the past, Xu Zhiyuan made high-level friends and had a close relationship with Hong Kong billionaires Liu Luanxiong and Zhang Zhongqiao, and they played cards together.Jan liu’s wife USD 400 million investment The electric vehicle subsidiary of Evergrande.

Haihua Island, an artificial island off the coast of Hainan

The Haihua Island, an artificial archipelago on the Hainan coast under development by Evergrande, is part of the company’s long-term attempt to expand its construction and apartment business outside of its main business © Oriental Image from Reuters

The Chinese government is another matter. In August, the highest regulatory authority Publicly reprimand Evergrande Regarding the necessity of solving the debt problem, a month later, the Hui people were photographed in Tiananmen Square on the 100th anniversary of the founding of the party. He also recently stepped down as the head of Evergrande, a subsidiary of Evergrande in mainland China, but is still in charge of the group.

“The fact that the Hui was invited to participate in the party’s centennial birthday this year means that he is within Xi Jinping’s focus,” Cercius researchers pointed out, “this is usually not a good thing.”

Evergrande’s recent financial woes coincided with a time when extreme wealth — and the individuals who owned it — lost Beijing’s favor, while Xi Jinping was pushing for “common prosperity.”

This transformation is intertwined with the humility of Jack Ma and others, who last year Disappeared Later Shocked the government to cancel His Ant Group went public for 37 billion U.S. dollars.

Mr. Xu, who had hosted Jack Ma at his Guangzhou Evergrande Football Club in the past, mentioned Jack Ma’s other company, Alibaba, in his 2018 speech.

“The development of Chinese private enterprises is based on the good policies of the party,” he said at the time. The question now is what the party’s future policy means not only for his corporate destiny, but also for the remaining 13 billion US dollars of wealth it has created for him.

Additional reporting by Wang Xueqiao in Shanghai and Sherry Fei Ju in Beijing

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