Chinese property giant was excluded after the spectacular fall

The actions of the Chinese property giant Evergrande were removed from the Hong Kong stock market on Monday after more than a decade and a half of negotiation.

It marks a gloomy milestone for what was once the largest real estate firm in China, with an assessment of the stock market of more than $ 50 billion (£ 37.1bn). That was before his spectacular collapse under the weight of the huge debts that had driven his meteoric increase.

Experts say the elimination was inevitable and final.

“Once eliminated, you don’t have to return,” says Dan Wang, director of China, political risk consultant, Eurasia Group.

Evergrande is now better known for its part in a crisis that for years has dragged the second largest economy in the world.

Only a few years ago, Evergrande Group was a brilliant example of China’s economic miracle.

Its founder and president Hui Ka Yan left humble beginnings in rural China to head the list of forbes of the richest people in Asia in 2017.

Since then, his fortune has collapsed from an estimate of $ 45 billion in 2017 to less than one billion, his fall of grace as extraordinary as that of his company.

In March 2024, Mr. Hui was fined $ 6.5 million and forbidden in China’s capital market for his company exaggerating his income at $ 78 billion.

Liquidators are also exploring whether they can recover effective for the creditors of the personal property of Mr. Hui.

At the time of its collapse, Evergrande had about 1,300 projects in development in 280 cities in China.

The extensive empire also included an electric car manufacturer and the most successful football team in China, Guangzhou FC, who was expelled from the Football League earlier this year after not paying enough of his debts.

Evergrande was built at $ 300 billion (£ 222 billion) of money borrowed, which earned him the little enviable title of the most indebted real estate developer in the world.

Power was established after Beijing brought new rules in 2020 to control the amount that great developers could borrow.

The new measures led Evergrande to offer their properties with great discounts to ensure that money would arrive to keep the business afloat.

Fighting to comply with interest payments, the company soon breached some of its debts abroad.

After years of legal disputes, Hong Kong’s Superior Court ordered the company to be completed in January 2024.

Evergrande’s actions had been threatened from the list since then because they were suspended from quoting after the court order.

At that time, the crisis involved in the company had cleaned more than 99% of its value market assessment.

The liquidation order occurred after the company could not offer a viable plan to yield billions of dollars of liabilities abroad.

Earlier this month, the liquidators revealed that the debts of Evergrande are currently $ 45 billion and that until now it had sold only $ 255 million of assets. They also said that they believe that a complete review of the company “will be out of reach.”

The “Delisting Now is surely symbolic, but it’s a milestone,” says Wang.

All that remains is what are paid to the creditors and how much they can obtain in the bankruptcy process, says Professor Shitong Qiao of the University of Duke.

The next liquidation hearing will take place in September.

China faces a series of important problems, including the rates of the president of the United States, Donald Trump, the high debt of the local government, the weak consumer expense, unemployment and a population that ages.

But experts say that Evergrande’s collapse, along with the serious problems facing other developers, has affected the strongest country.

“The fall of the property has been the greatest drag for the economy, and the final reason why consumption is suppressed,” says Wang.

This is particularly problematic since the industry represented approximately one third of the Chinese economy and was an important source of income for local governments.

“I don’t think China has found a viable alternative to support its economy on a similar scale,” says Professor Qiao.

The property crisis has led to “mass dismissals” of very innumated developers, says Jackson Chan of the Bondsupermart financial market research platform.

And many employees of the real estate industry who maintained their works have seen great salary cuts, he adds.

The crisis is also having a great impact on many homes, since they tend to put their savings on the property.

With housing prices in at least 30%, many Chinese families have seen that their savings fall into value, says Alicia García-Herrero, chief economist of Asia Pacific in French Bank Natixis.

This means that they are less likely to spend and invest, he adds.

In response, Beijing has announced a series of initiatives aimed at reliving the real estate market, stimulating consumer spending and increasing the economy in general.

They range from measures to help new housing owners and support the stock market to incentives to buy electric cars and household items.

Despite the hundreds of billions of dollars that Beijing has become the economy, the growth that was once China has decreased to “around 5%.”

While most Western countries would be more than happy with that, it is slow for a country that saw a growth of more than 10% per year in 2010.

In short, probably not.

Even while Evergrande continues to take the headlines, several other Chinese real estate companies still face great challenges.

Earlier this month, China South City Holdings received an amazing order by Hong Kong’s Superior Court, which makes it the largest developer that was forced to liquidation from Evergrande.

Meanwhile, Rival Estate Giant Country Garden is still trying to ensure an agreement with its creditors to cancel more than $ 14 billion of outstanding foreign debts.

After a series of postponements, its next liquidation hearing of the Superior Court in Hong Kong will take place in January 2026.

“The entire real estate sector has been in trouble. More Chinese real estate companies will collapse,” says Professor Qiao.

While the Chinese government has taken a series of measures to help underpin the real estate market and support the economy as a whole, it has not been inclined to directly rescue developers.

Chan says that these initiatives seem to have a positive impact on the real estate market: “We believe that the fund (it has been achieved) and should be in a slow recovery. However, we probably do not expect the recovery to be very strong.”

The Wall Street investment giant, Goldman Sachs, warned in June that the prices of properties in China will continue to fall until 2027.

Mrs. Wang agrees and estimates that China’s affected real estate market “will arrive at the bottom” in about two years when demand finally updates the offer.

But Mrs. García-Herrero puts it in more marked terms: “There is no real light at the end of the tunnel.”

Beijing has sent a “clear message about his intention not to rescue the housing sector,” adds Mrs. Wang.

The Chinese government has been careful to avoid the type of measures that could promote more risky behavior by an already very indebted industry.

And while In booming times, the real estate market was a key promoter of China’s economic growth, the priorities of the ruling communist party are now in another place.

President Xi Jinping is more focused on high -tech industries such as renewable energy, electric cars and robotics.

As Mrs. Wang says, “China is in a deep transition to a new era of development.”