BEIJING: From rural poverty to actual property billions, the fortunes of Xu Jiayin tracked China’s runaway development for a lot of the previous 20 years – however now he’s battling to avoid wasting his Evergrande conglomerate from a quagmire of debt.
The 62-year-old – often known as Hui Ka Yan in Cantonese – was at one level China’s richest man, with a style for luxurious labels, unique yachts and a nostril for praising the Communist Get together that steered the financial system to a house possession increase.
However Evergrande is sagging below a whole lot of billions of {dollars} of debt as fears mount of an imminent collapse that might ricochet the world over’s second-biggest financial system.
“China’s property builders – and their collectors – seem like approaching a reckoning,” mentioned analysts at Capital Economics in a be aware.
They warned Evergrande is “near collapse” with massive losses looming for banks, bondholders and residential consumers.
Whole liabilities had swelled to 1.97 trillion yuan (US$305 billion), the embattled group mentioned final week, warning of the chance of default.
Evergrande began to falter below the brand new “three crimson traces” imposed on builders in a state crackdown in August 2020 – forcing the group to dump properties at more and more steep reductions.
Xu’s ascent mirrored China, rocketing from a largely rural and impoverished society to the gargantuan financial system it’s as we speak.
The now-billionaire, whose mom died when he was a 12 months previous, recalled in a 2017 speech how he ate simply candy potato and steamed bread all through his college years.
“The sheets I laid, the quilts I lined, and the garments I wore had been all lined with piles of patches,” Xu mentioned.
“At the moment, my biggest want was to exit of the countryside, discover a job and be capable to eat higher meals.”
After leaving college in 1976 – the tip of the decade-long Cultural Revolution – he struggled to search out work.
As faculties reopened, Xu studied metallurgy and was later assigned to a state-run metal manufacturing unit.
He left in 1992 for Shenzhen, the buzzing coronary heart of China’s reform and opening-up experiment within the 1990s, earlier than founding Evergrande in 1996.
US$60 MILLION SUPERYACHT
All 323 flats within the agency’s first accomplished mission offered in half a day, and raked in 80 million yuan.
Evergrande threw itself into mass growth, constructing in-demand flats throughout China and capitalising on its fast wealth accumulation.
The group listed in Hong Kong in 2009, elevating HK$70.5 billion (US$9 billion) in its preliminary public providing, making it China’s largest non-public actual property firm and making Xu the mainland’s richest man with a internet value of 42.2 billion yuan.
In 2010, Xu purchased the then-embattled Guangzhou soccer workforce, renaming it Guangzhou Evergrande and pouring cash into world-class gamers and coaches.
A soccer novice when he purchased the membership, Xu helped the workforce win eight league championships.
He additionally cracked down on dangerous behaviour, reportedly fining a participant who challenged the referee and introducing the “5 Musts” – together with “Gamers should obey the referee’s judgement unconditionally”.
The group additionally invested in electrical automobiles, tourism and bottled water.
In keeping with the SuperYachtFan web site, Xu is the proprietor of a US$60 million yacht.
He additionally has a non-public jet, which Australian media reported he used for scouting out Sydney growth alternatives in 2014.
Xu additionally turned recognized for a love of luxurious labels, significantly French model Hermes – incomes the nickname “Belt Xu” after carrying a Hermes belt for the nationwide political congress in 2012.
Some have speculated his success has come from helpful shut relationships, together with with the brother of former premier Wen Jiabao.
However Xu has attributed his success to training – and the Communist Get together.
“With out the resumption of the nationwide school entrance examination, I’m nonetheless within the countryside. And not using a state grant of 14 yuan, I could not go to school. With out the nation’s reform and opening up, Evergrande is just not what it’s as we speak,” he mentioned.
“Every part of Evergrande is given by the Get together, the state and the society.”
However Xu is now going through a authorities crackdown on excessive wealth, with President Xi Jinping main a drive for “widespread prosperity” towards huge wealth.
In 2017, his wealth was estimated at US$43 billion, in accordance with the Bloomberg Billionaires Index.
However that’s now right down to lower than US$9 billion, having misplaced an eye-watering US$14.5 billion for the reason that begin of the 12 months alone as the worth of Evergrande has collapsed.
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