On August 25, 2025, the shares of China Evergrande Group, once the crown jewel of the country’s property development sector, vanished from the Hong Kong Stock Exchange. For seasoned market watchers, the delisting was the final act in a drawn-out saga that had gripped investors, homebuyers, and policymakers for years. Yet the story of Evergrande’s spectacular rise and dramatic fall is more than a tale of corporate misfortune — it’s a mirror reflecting the shifting fortunes and future challenges of China’s entire economy.
Evergrande’s journey began in 1996, but it was the urbanization boom of the 2000s and 2010s that propelled the company to dizzying heights. Founder Hui Ka Yan, who rose from poverty, rode a wave of unprecedented housing demand as millions of rural Chinese moved to cities in search of better lives. According to The Indian Express, China’s urban population soared from 16% in 1960 to around 66% by 2024 — a transformation that fueled not just Evergrande’s growth, but the nation’s as well. At its peak in 2017, Evergrande was valued at $51 billion, and in 2018, it was briefly the world’s most valuable real estate company.
Evergrande’s model was bold and, for a while, wildly successful: buy land at scale, pre-sell apartments for cash, and use the proceeds to fund the next round of projects. The company diversified into health care, finance, and even sports, famously acquiring the Guangzhou Football Club. But beneath the surface, cracks were forming. The firm’s growth was built on mountains of debt, and its relentless expansion left it dangerously exposed once the winds shifted.
The turning point came in 2020, when Beijing introduced the so-called “three red lines” policy — a set of rules designed to curb excessive borrowing by property developers. As reported by AFP and The Indian Express, this move abruptly cut off the cheap credit that Evergrande had relied on for years. The company, already juggling thin cash buffers and a business model dependent on perpetual pre-sales, found itself unable to keep up with payments. Demand for housing was also slowing, with an ageing population and many urban households already owning multiple properties. The result? Evergrande’s fortunes reversed almost overnight.
The consequences were seismic. By the time the crisis erupted in 2021, Evergrande had more than 1,300 unfinished projects scattered across 280 cities in China. The company defaulted on its offshore debt, its chairman came under investigation for fraud, and in 2024, a Hong Kong court ordered the company into liquidation. As of August 2025, Evergrande’s debt load had ballooned to $45 billion. According to liquidators, only $255 million worth of assets had been sold 18 months into the process, while creditor claims continued to mount.
The Hong Kong Stock Exchange’s decision to delist Evergrande after 18 months of suspended trading was, as Dan Wang of Eurasia Group told AFP, “absolutely inevitable.” The company’s market value had all but evaporated, and its obligations had become too great to ignore. “The surprising part is actually how late the delisting is,” Wang remarked, noting that Evergrande’s initial default had occurred nearly four years earlier.
But the collapse of Evergrande was never just about one company. The property sector’s troubles have rippled across China’s economy, impacting everything from steel and cement production to local government finances. As The Indian Express explained, local governments lost vital revenue from land sales, while household wealth tied up in property eroded consumer confidence. Even with a raft of government measures — including the easing of mortgage rules and efforts to complete unfinished projects — property prices continued to decline in July 2025, according to official data cited by AFP.
“Given the high exposure of Chinese households to real estate, establishing a trough on prices is one of the most important factors to restoring confidence and generating a sustained consumption recovery,” Lynn Song, chief economist for Greater China at ING, wrote in a recent note. “It’s difficult to expect consumers to spend with greater confidence if their biggest asset continues to decline in value every month.”
Policymakers, facing the daunting reality of a shrinking property sector, have shifted their focus. The government’s priority now is ensuring “housing delivery” for ordinary buyers, leaving creditors — especially foreign ones — to absorb much of the pain. Meanwhile, other major developers such as Country Garden have also stumbled, underscoring the sector’s systemic challenges.
There are inevitable comparisons to the 2008 collapse of Lehman Brothers, but experts caution against drawing too close a parallel. While the appointment of restructuring firm Alvarez & Marsal — veterans of the Lehman case — by a Hong Kong judge in 2024 highlights the complexity of Evergrande’s unwinding, the Chinese government has so far managed to “firewall” the crisis, preventing it from triggering a broader financial meltdown. As Lizzi C. Lee, a fellow at the Center for China Analysis, told The Indian Express, the Evergrande saga is “less a ‘Chinese Lehman moment’ and more a reckoning with the limits of China’s debt-fueled, property-centric growth model.”
The effects of the downturn are likely to linger. Economists expect that property market prices may not bottom out until late 2026 at the earliest. In the meantime, China’s leadership is under pressure to find new engines of growth. As Dan Wang of Eurasia Group put it, “Now it’s time to find an alternative engine for growth. If we are still betting on housing, that will be a mistake.”
China has set a national growth target of around 5% for 2025, the same as last year, but many analysts see this as an ambitious goal given the headwinds facing the property sector and broader economy. President Xi Jinping has repeatedly stressed the need to shift toward a growth model powered more by domestic consumption and technological independence, rather than investment in real estate and infrastructure.
As Evergrande’s name fades from trading screens, its legacy — and the lessons it offers — remain front and center for China’s policymakers, investors, and millions of ordinary citizens. The end of Evergrande as a public company marks not just the close of a chapter, but the start of a new and uncertain era for the world’s second-largest economy.
