In late 2023 and early 2024, China’s property giant Evergrande collapsed under the weight of $300+ billion in liabilities, triggering a crisis of unfinished homes, angry homeowners, and financial uncertainty at home and abroad.
A Hong Kong court ultimately ordered Evergrande liquidated in January 2024, capping a turbulent saga that began with its 1996 founding.
Today, vast “ghost” residential complexes – some built by Evergrande – stand empty in cities across China, emblematic of the country’s stalled real-estate boom.
Middle-class buyers who paid deposits for apartments find themselves in limbo, while Chinese banks, local governments and global investors scramble to contain fallout.
Evergrande’s crisis – sometimes compared to the U.S. subprime bust or Japan’s 1990s real-estate collapse – is in many ways unique to China’s system, shaped by decades of boom, heavy borrowing by developers, and Beijing’s policy maneuvers.
The collapse has already prompted protests in Shenzhen and risked jolting high-yield credit markets, yet analysts warn that wide contagion may be limited by China’s controls.
This deep investigation traces the rise and fall of Evergrande: from its founding through its landmark defaults, the ongoing liquidation process in 2024–2025, and the broader implications.
We detail how Evergrande’s implosion has rippled through China’s housing market, banks and local government finances, and examine the exposure of foreign creditors. We compare China’s situation to earlier crises abroad – the 2008 U.S. housing bust, Japan’s lost decades after the 1990s bubble, and Dubai’s 2008 debt debacle – to illuminate both parallels and differences.
Along the way we include voices of affected homebuyers, investors and experts on the ground. (Evergrande’s founder Xu Jiayin, also known as Hui Ka Yan, was detained in late 2023; Hong Kong liquidators are suing to recoup payouts and are clawing back bonuses.)
Evergrande’s Rise: 1996–2018
Evergrande was founded in 1996 by billionaire Xu “Hui” Jiayin, during China’s urban property boom. Hui turned it into a sprawling conglomerate: a real-estate group with businesses in electric cars, finance, health care and tourism. By 2016, just two decades later, Evergrande entered the Fortune Global 500 list; in 2018 it was ranked the world’s most valuable real-estate brand.
At its peak in 2017, Evergrande’s market capitalization was tens of billions of dollars. In 2018 alone, Evergrande sold over ¥600 billion (about $90B) of homes.
However, this explosive growth was fueled by aggressive borrowing. Evergrande’s off-balance-sheet investments (insurance products sold to retail investors), huge takeovers (e.g. of soccer club Guangzhou Evergrande), and ever-expanding projects meant debt piled up.
Industry observers note that Evergrande became “Asia’s biggest junk-bond issuer” and by the end of 2020 was $310 billion in debt.
Indeed, as early as late 2020 Beijing had begun tightening developer lending with “three red lines” rules limiting leverage – a move that slowed Evergrande’s ability to roll over debt. By the end of 2021, Evergrande was downgraded by Fitch to “restricted default” after missing bond coupons.
Analysts estimate that by 2022 Evergrande’s total liabilities had exceeded $335 billion, roughly 1.8% of China’s GDP. Of this, about $25.4 billion was owed to foreign creditors; the rest was onshore (domestic bonds, bank loans and wealth-management products). (A detailed breakdown from 2022 shows roughly 93% domestic vs 7% foreign debt.)
Timeline of Key Events (Evergrande 1996–2024)
Evergrande is founded (1996); it joins the Fortune 500 (2016); it achieves world’s most valuable real-estate brand (2018).
In August 2020 Beijing imposes “three red lines” on developer debt. In late 2021, Evergrande defaults on onshore bonds and misses offshore coupon payments.
In Sep 2021 it negotiates a domestic bond payment at the last minute, aided by a People’s Bank of China injection of 90 billion yuan into banks.
By December 2021 Fitch deems it in default. In Aug 2023 Evergrande files for Chapter 15 bankruptcy in New York (to protect overseas debt).
On January 30, 2024, Hong Kong’s High Court orders Evergrande liquidatedreuters.com, after finding it “grossly insolvent”.
In September 2024 reports emerge that founder Hui Ka Yan is being held in a special detention center in Shenzhen.
In early 2025, Hong Kong liquidators win winding-up orders against Evergrande subsidiaries and begin litigation to claw back funds.
Domestic Fallout: Housing, Banks and Local Governments
The Ghost Cities of China’s Boom
Image: Unfinished apartment blocks in a Chinese housing development (June 2022, Guilin). Across China, miles of high-rises sit largely empty – new “ghost cities” born of the boom.
In late 2021 Reuters reported that 65 million Chinese homes were unoccupied – a stock equal to the total number of households in France and the UK combined.
Many were built and sold off plan during the boom, with investors hoping to flip or rent them; far fewer occupants moved in. Evergrande itself erected dozens of mega-projects (residential towers, entire themed “tourism cities” on the coast of Hainan, hotels, office blocks) that are now partially or wholly unfinished.
One high-profile example was the “Evergrande Cultural Tourism City” in Taicang (pictured by drone in 2021) – construction ceased midway through. The development pictured above, in Guilin, is owned by another firm, but it typifies the nationwide phenomenon of skeletal towers.
These empty complexes have become protest sites.
Hundreds of thousands of Chinese middle-class homebuyers, having paid down payments and mortgages on projects that stalled, have lodged complaints and some staged collective actions.
In 2021–22 thousands of angered buyers threatened mortgage strikes to press developers and banks to finish projects.
Buyers have moved into partly-built buildings to “occupy” them and draw attention, living in sparse conditions to force a resolution.
As one homeowner Xu (55) in a half-built complex told Reuters: “All the family’s savings were invested in this house…”, and now their unfinished apartments (“rotting” frames) provide only mud and toil.
In Henan province and elsewhere, unpaid purchasers have camped out to coerce local officials to intervene.
“We seem to have no way of resolving this issue,” said a disgruntled Evergrande buyer in Shijiazhuang, adding he’d “lost faith” in housing authorities and developers.
Another young investor in Beijing, covering her face in fear of reprisal, recalled a salesman promising facilities (schools, parks) that never materialized; “I feel I was lied to,” she said.
The government has grown uneasy. Central and provincial officials in late 2023 launched supportive measures – cutting mortgage rates and downpayment requirements for first homes, and even using public funds to purchase unsold flats for social housing – in hopes of stabilizing buyers’ confidence.
Still, unfinished towers loom across dozens of provinces. One recent report noted that outside Shenyang and Shijiazhuang, there are vast estates of crumbling villas and apartments being reclaimed by weeds.
“Greedy developers built too many homes too quickly,” said an analyst quoted in a BBC report, estimating 60–80 million empty units nationwide.
Banking Sector and Shadow Debt
Even before Evergrande, China’s banking system was heavily exposed to property loans. Evergrande and other developers relied on a mix of bank credit, trust financing, and wealth-management products (WMPs) sold to retail investors.
Many domestic creditors – from state-owned banks to regional trust companies – face losses. In September 2021, as Evergrande neared its first defaults, the central bank pumped 90 billion yuan into the financial system to prevent panic.
Such support relieved immediate stress, but did not solve developers’ crippling debt.
Evergrande’s own obligation to repay wealth-management products – essentially high-yield investment contracts sold to the public – became a flashpoint in mid-2022. Its WMP unit announced it could no longer meet payouts, and dozens of investors gathered at government offices in Shenzhen demanding answers.
Though Evergrande promised to make incremental repayments, by late 2022 many buyers still had unpaid principal. Across China, faith in developer-sold financial products eroded.
An economist at Shenwan Hongyuan Research Institute warned that unfinished projects and WMP defaults “could exacerbate developers’ debt problems” and dent consumers’ confidence.
Non-performing loans in some smaller banks and trust firms have already risen. Some local lenders with heavy property portfolios have tightened new lending.
Yet analysts generally do not expect a systemic banking crisis. Unlike the U.S. 2008 housing bust, China’s banks retain substantial capital buffers, and the central bank has ample firepower to backstop financial institutions.
As one report noted, most developers’ collapse would first hurt bond investors and suppliers; Chinese regulators have mostly ring-fenced the banking system so far. Still, China’s massive property debt (roughly 33.5 trillion yuan, or ~$5 trillion, across the sector) remains a long-term drag, equal to about 40% of GDP.
Local Governments and Land Finance
Local governments in China have long depended on land-sale revenue to fund budgets and debt. In recent years land sales typically accounted for one-third of local revenues.
Evergrande’s collapse has depressed land prices and stalled new sales.
Many cities, facing shortfalls, have come under budgetary pressure. Some have issued special bonds or drawn down reserves to shore up spending.
Others are taking over unfinished sites themselves: numerous local governments have quietly finished a fraction of halted projects or seized stakes in local developer ventures to protect buyers. In one province, officials announced they would “buy back” and lease unsold homes to stabilize the market.
Municipal debt (often raised through financing vehicles) had already climbed during the real-estate boom. Now with land auction revenues down, concern is growing over local government debt levels. A recent Peking University study noted local governments had over 20 trillion yuan of “hidden” debt by 2022 – much of it tied to property projects.
Central authorities have spoken publicly about preventing local fiscal stress, but concrete measures have been limited. Still, Beijing’s approach so far has been to avoid bailing out developers directly, favoring targeted support (like bank liquidity, bond-for-equity swaps) and nudging state-owned firms to step in on key projects.
Homeowners and Social Strain
Meanwhile, Evergrande’s homebuyers remain in limbo. An estimated 1.6 million buyers had paid deposits for Evergrande homes by late 2021.
With over 90% of Chinese urban households owning property, frozen by unfinished purchases, the Evergrande debacle risks eroding faith in the housing market. Homeowners have mounted petitions and small sit-in protests at developer sites.
In a now-famous sign of discontent, Evergrande investors in Shenzhen began visiting government offices in late 2024, quietly lobbying officials for an update on the rescue process.
As one middle-class investor told Reuters: “If we don’t speak out now, there will never be a chance,” illustrating the depth of their frustration.
The Chinese government is acutely aware of the potential for social unrest. Analysts note that even slight shocks to homeowners’ expectations (mortgage suspensions, delayed moves) could fan broader discontent.
Thus far, regulators have issued stern warnings to banks to continue lending on mortgages and to developers to complete promised homes.
In September 2024, two sources revealed that Evergrande had nearly finished enough of its ongoing projects that “more than 70% of the construction is completed” on promised units – evidence that completion, not collapse, is the official priority.
Courts have even approved the idea of transferring some Evergrande debts into stakes in its subsidiaries, in hopes of preserving value.
Still, for many individuals like Xu and others living among “rotting” frames, trust has been deeply shaken.
International Repercussions: Creditors and Contagion
Global Credit Markets at Risk
Evergrande’s collapse has alerted investors around the world. The group was one of the largest issuers of dollar bonds among Chinese developers – at peak owing about $19–23 billion in offshore bonds.
Its bankruptcy filings and defaults wiped out many of these bondholders: by late 2024 an Evergrande dollar bond traded for pennies on the dollar, essentially worthless. A New York Times analysis showed about $6 billion of past payments to Evergrande insiders and employees are now targets for clawback by liquidators.
Foreign bond investors have borne most of the losses. A chilling metaphor was offered by economist George Magnus: foreign bondholders – including large global funds that had purchased Evergrande debt – “will be hung out to dry”.
He explained that Chinese authorities would not allow an outright bailout of overseas creditors at the expense of domestic interests, especially in a politically sensitive sector. Indeed, one post-mortem in a Chinese law journal explained that in cases like Evergrande, local courts have historically seized projects to appease onshore creditors, often shutting out foreigners.
In practice, this means hedge funds and banks holding Evergrande bonds (in New York, Hong Kong, London) face painful write-offs. Many had assumed the Chinese government would orchestrate an orderly restructuring; now they see that any recovery will likely be far below face value.
At the same time, China’s official voices and analysts have urged calm. Evergrande’s high-level creditor, China Minsheng Bank, moved to reassure markets that exposure is limited. And authorities in Beijing have repeatedly said they will manage the fallout, not let it metastasize. Indeed, some commentators argue that a systemic crisis is unlikely.
Financial data firm China Beige Book told Reuters that a true Lehman-style contagion is “near impossible” because the Chinese state tightly controls banks and capital flows. In other words, losses can be quarantined. The argument goes that, unlike the global integration of 2008, China’s credit boom took place largely within its borders, so most consequences will stay local.
Supply Chains and Chinese Industry
Evergrande’s troubles also reverberated through supply chains. The firm owned an ambitious electric-vehicle unit (Evergrande NEV) that once touted itself as a rival to Tesla.
That venture has all but stalled amid the parent company’s cash crunch.
In early 2025 the EV arm reported “severe liquidity” problems and warned it might lose key assets to creditors.
Its factories, built at great cost, are idle. Similarly, Evergrande’s mega theme-parks and cultural centers (planned from Wuhan to Jurong) remain unfinished or have been sold at a fraction of cost, slowing tourism investments. Even its ambitious freight and manufacturing projects – like a planned semiconductor joint venture – have been abandoned.
Some suppliers have complained of unpaid bills. Firms that built Evergrande’s developments or supplied materials reported delayed or reduced payments.
This extends risk to banks and funds that financed those contractors. Globally, the direct exposure beyond bonds is limited – Evergrande wasn’t a major importer of foreign-made construction equipment or materials – but its case serves as a warning.
European and American investors have taken a cold look at other China property names; since Evergrande’s collapse, Chinese high-yield bonds have broadly sagged as investors grew wary of any developer linked to local government debt.
Financial Markets and Policy Reactions in Wake of Evergrande Collapse
International financial markets have been jittery. In January 2024, global stock indices briefly dipped on Evergrande fears, though losses were quickly recovered. In China and Hong Kong, banking and real-estate stocks fell on the liquidation news.
Credit default swaps on Chinese corporate debt have spiked, reflecting renewed concern about defaults in China’s A-share and bond markets. Central banks around Asia monitored the situation; a sudden “China credit crunch” could slow economies from Australia to Singapore. In practice, however, other policy pressures (like Covid reopening bumps) have muted a wholesale sell-off.
In the U.S., Evergrande has entered regulatory focus. On Capitol Hill, Evergrande’s failure fueled debates over the risks of holding Chinese debt. Some pension fund managers that owned Evergrande paper are facing scrutiny. The fall of what was once China’s biggest developer has become a cautionary tale in IMF and Federal Reserve reports on emerging-market risk. Financial regulators are comparing it to the 2008 housing crash, but generally concluding that lessons in leverage apply more broadly than specifics of subprime.
Lessons from Past Crises
Evergrande’s implosive collapse has invited countless historical comparisons – to Wall Street’s 2008 meltdown, Japan’s real-estate bust of the 1990s, and even Dubai’s crash a decade ago. Each offers context:
- U.S. 2008 subprime crisis: Like 2007–08, Evergrande’s crisis centers on overleveraged mortgages and housing. Many Chinese homebuyers, like American subprime borrowers, locked into mortgages they could scarcely pay when values fell. In both cases, the bubble was partly fueled by easy credit and speculative buying. Differencesabound: China’s banking system is dominated by state banks with large capital buffers and no toxic mortgage bundling akin to U.S. mortgage-backed securities. Chinese mortgages are smaller relative to incomes (typical loan-to-value limits are lower), and Chinese borrowers cannot simply “walk away” by declaring personal bankruptcy. Moreover, the Chinese government’s role as ultimate backstop is far more direct. In the U.S., subprime debt was largely held by private banks and global investors; in China, much property debt is effectively onshore and subject to Chinese law. As one commentator put it: this is a “whole different situation” than 2008. Nevertheless, regulators worldwide note a common theme: excessive credit cycles can end badly.
- Japan’s 1990s bubble: In the late 1980s Japan experienced an epic asset bubble, with land and property prices that later collapsed and triggered decades of stagnation. Evergrande’s story has echoes of Japan: rapidly urbanized markets, high homeownership, and an expectation that the government would prop up values if needed. Importantly, both bubbles were driven in large part by policy and banking decisions rather than pure free-market folly. (Nippon.com notes that Japan’s bubble was mainly a market failure, whereas China’s real-estate bubble owes more to government-driven incentives like land-lease sales.) The risk of an extended slowdown now looms for China too: Nippon warns that China could repeat a “lost 30 years” if the property crunch deepens. Beijing’s response – refusing large bailouts and pressing developers to deleverage – already differs from Japan’s approach (in Japan, the authorities let zombie banks and firms limp on). Chinese officials have at least signaled they favor orderly restructuring over blanket bailouts, perhaps hoping to avoid what Japan faced: a long hangover of non-performing loans.
- Dubai 2008 real-estate crash: Dubai’s excesses in the mid-2000s led to the infamous Dubai World debt standstill in 2009. At first glance Evergrande’s situation looks similar: overbuilding, sky-high debt, and a sudden credit freeze. Analysts point out differences: Evergrande’s debt (over $300B) dwarfs Dubai World’s ($59B in 2009), reflecting China’s much larger economy. Dubai’s developers and government (Dubai World) sought an international bailout plan, eventually paying back creditors over time; Chinese authorities, by contrast, have been more reluctant to negotiate with foreign investors. Both cases show the risks of oversupply and leverage in real estate hubs: in Dubai, luxury condo prices halved when the bubble burst, and many projects were abandoned. China similarly faces the prospect of expensive white elephants on its city skylines. The key difference may lie in governance: Dubai relied on its sovereign wealth fund and central cash infusions, whereas China is using regulatory credit easing, local-government purchases, and some forced debt-equity swaps to try to stabilize its market.
Worldwide Impact and Looking Ahead
For global investors, Evergrande has become a litmus test of China risk. A sudden, disorderly default might have spooked Asian credit markets; instead, Beijing’s cautious intervention (pressuring debt-equity deals, allowing state-affiliated developers to take over projects) has largely contained panic.
Financial research firms have noted that contagion outside China appears limited: unlike 2008, contagion now would have to spill out of China’s relatively closed capital account. Goldman Sachs and Fitch, among others, have continued to call China’s economy stable enough to avoid a wider credit crunch.
Inside China, the work of untangling Evergrande is only beginning. Hong Kong liquidators have so far clawed back negligible sums relative to the $300B owed, but they are pursuing lawsuits against former executives, auditors (PwC) and brokers (CBRE) to recover misused funds.
On-the-ground, Evergrande’s remaining staff are racing to complete nearly-finished projects, to fulfill buyer contracts and reduce social fallout.
Local governments face key decisions on whether to shoulder any losses on incomplete housing or force further restructuring on Evergrande’s legacy.
As of 2025, homebuyers in places like Shenyang and Shijiazhuang still point to stalled skyscrapers as everyday reminders of the crisis. An Evergrande purchaser in Hebei province told Reuters: “It has made me lose faith in … real estate,”reflecting a sense of betrayal.
Economists worry that unless large-scale absorptions or conversions of empty units occur, China could have a decade-long hangover of weak property investment and slow consumer spending. The Evergrande saga — its ghost cities and its debt — is thus emblematic of a deeper turning point in China’s economy. How Beijing navigates the next steps will affect not just Chinese real estate, but global confidence in lending to emerging markets.
This reporting about Evergrande Collapse draws on a wide range of trusted data..All information in this report is drawn from primary and secondary sources, including investigative journalism, official documents, NGO reports, academic studies, and direct testimonies. Below is a list of cited sources for verification.
- China’s indebted property market and the Evergrande crisis
- In China, home buyers occupy their ‘rotting’, unfinished properties
- Exclusive: In careful protest, China Evergrande’s investors press for action
- Evergrande collapse means foreign investors in China face even greater uncertainty
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