It was a Monday morning in late August 2025 when China Evergrande Group, once the world’s largest property developer by market capitalization, quietly vanished from the Hong Kong Stock Exchange. The delisting, effective as trading began, marked the final chapter in a saga that has gripped global financial markets, rattled millions of Chinese homeowners, and exposed deep fissures in the world’s second-largest economy. Yet, as the dust settled, the reaction was almost anticlimactic: while Evergrande’s creditors braced for a long and messy liquidation, Chinese stocks actually leapt by 1.5% that very day, according to NBC News and TheStreet.
Evergrande’s fall from grace has been both spectacular and symbolic. Founded in 1996 by Hui Ka-yan, a former steel technician with a knack for leveraging local political ties, the company expanded at breakneck speed, building more than 1,300 projects across 280 cities by the time of its collapse. Its dizzying rise mirrored the boom in China’s property market, which at its peak accounted for nearly a fifth of the country’s GDP—and even more when related sectors like steel, copper, and home furnishings were included, as reported by NBC News.
The company’s aggressive borrowing spree was enabled by a system in which local governments relied heavily on land sales and construction permits to pad their budgets. Flush with capital from its 2009 Hong Kong listing, Evergrande became a household name, branching out into soccer with the wildly successful Guangzhou FC—once managed by World Cup-winning coaches—and even dabbling in bottled water and electric vehicles. At the height of its power, Hui Ka-yan was celebrated as Asia’s richest man.
But the house of cards began to wobble in August 2020, when Beijing introduced the so-called “three red lines” policy, imposing strict limits on property developers’ leverage and liquidity. Evergrande, saddled with $300 billion in loan obligations, instantly found itself in violation of these new rules. The company’s business model, which relied on rapid sales of new developments to fund future projects, ground to a halt as wary homebuyers withdrew, fearing their deposits would be lost to unfinished buildings. By September 2021, Evergrande had stopped publishing its monthly contract sales, a telling sign of deeper troubles ahead (TheStreet).
The consequences were swift and far-reaching. Homebuyers, many of whom had paid upfront for apartments that might never be built, were left in limbo. Construction sites across China stalled, affecting demand for everything from cement to appliances. The ripple effects extended to the broader economy, with consumer spending taking a hit as families saw their primary source of wealth—real estate—lose value. Home prices and investment have continued to fall through 2025, despite government efforts to stabilize the sector, according to NBC News.
Evergrande’s shares, once trading above HK$32 in 2017 and giving the company a market cap exceeding $50 billion, had plummeted to just 16.3 Hong Kong cents before being suspended in January 2024. The Hong Kong Stock Exchange’s rules stipulate that a company’s listing can be canceled if trading is suspended for 18 consecutive months—a milestone Evergrande reached this summer (NBC News, TheStreet).
The company’s liquidation, overseen by Alvarez & Marsal—the same firm that helped unwind Lehman Brothers—promises to be a long and complex process. Evergrande’s structure, with separate subsidiaries for each project, creates a labyrinthine web of assets and liabilities. Liquidators have already taken control of more than 100 Evergrande companies and assets worth about $3.5 billion, but so far, only $255 million has been realized from asset sales. Debt claims have soared to $45 billion as of July 2025, far exceeding the $27.5 billion disclosed in late 2022. The next court hearing is set for September 16, 2025 (NBC News).
Adding to the drama are the personal fortunes and legal woes of Evergrande’s top brass. Hui Ka-yan was placed under house arrest in 2023, fined $6.5 million, and banned from China’s financial markets for life for “organizing fraud.” The company’s main onshore unit, Hengda Real Estate, was slapped with a $580 million fine for fraudulent bond issuance and exaggerating sales. Meanwhile, Hui’s former wife, Ding Yu-mei, fled to London, where she reportedly holds a property portfolio worth $350 million. Creditors are hunting for evidence that Hui may have transferred additional assets to her, and liquidators have discovered an “astonishing” art collection in a Guangzhou apartment linked to Ding’s mother (TheStreet).
Evergrande’s collapse has not only shaken the property sector but also prompted a rethinking of China’s economic model. The government, led by President Xi Jinping, has made it clear that “homes are for living in, not for speculation”—a mantra repeated at national planning conferences since 2016. While Beijing has provided billions in lending and subsidies to help developers finish projects and deliver pre-sold apartments, it has largely allowed the market to correct itself, resisting the urge to bail out troubled firms like Evergrande (TheStreet, NBC News).
To bolster confidence, authorities have relaxed down payment and mortgage requirements, lifted restrictions on investment property purchases in major cities, and encouraged local governments to buy up excess apartments for affordable housing. Analysts at HSBC Global Investment Research see these moves as a sign of “enhanced proactiveness,” though they caution that sales and prices are likely to fall further in the near term (NBC News).
Curiously, the stock market’s reaction to Evergrande’s demise has been anything but panicked. In fact, Chinese stocks are up over 30% in the past year, and nearly 10% in the month before Evergrande’s delisting, as reported by TheStreet. Some analysts suggest that with the property market in tatters, Chinese households are redirecting their savings into equities, fueling a rally that could, in turn, restore household finances and spur consumer spending—a potential “virtuous spiral.”
There’s also speculation that investors are betting on China’s leadership in artificial intelligence. In 2025, Chinese AI company DeepSeek released an update that reportedly outperformed the American rival ChatGPT, bolstering faith in China’s tech sector. The tech-heavy Hong Kong market has surged even more than the mainland’s, outpacing the US Nasdaq over the past year. Meanwhile, China’s aggressive green energy transition—adding nearly 400 GW of new capacity in 2024, compared to just 50 GW in the US—may give it a crucial edge as AI’s energy demands soar (TheStreet).
Still, some caution that the rally could be a bubble, untethered from economic fundamentals and vulnerable to sudden shocks. With home prices still sliding and the property sector’s woes far from resolved, the next few weeks could prove decisive for both investors and policymakers.
For now, Evergrande’s delisting stands as a stark warning: even the mightiest can fall, and when they do, the reverberations can reshape an entire nation’s economic landscape.
