A Chinese court has convicted Evergrande Group's founder Xu Jiayin of large-scale financial fraud and sentenced him to life imprisonment, marking the conclusion of a high-profile case involving one of China's most prominent real estate developers.
A court in Shenzhen handed down a life sentence to Xu Jiayin, the founder of property developer Evergrande Group, on charges including massive financial fraud, embezzlement, and bribery. The Shenzhen Intermediate People's Court also imposed fines totalling 15.82 billion yuan (approximately US$2.4 billion) on the company and its real estate division. According to the court, Xu engaged in systematic asset inflation and liability concealment between 2016 and 2021, while also using corrupt means to gain control of financial institutions. Beyond Xu, five other senior executives received prison sentences ranging from six to 18 years, and a total of 56 individuals, including Xu's two sons, were sentenced in connection with the case.
Evergrande's collapse reflects a dramatic reversal of fortune for what was once China's leading property developer. The company reached a peak market value exceeding US$50 billion after listing in Hong Kong in 2009. However, Beijing's 2020 regulations aimed at curbing excessive borrowing in the real estate sector severely constrained Evergrande's financing options. The company defaulted in 2021, and a Hong Kong court ordered its liquidation in 2024, with shares subsequently delisted from the Hong Kong Stock Exchange.
The verdict underscores deepening troubles in China's property sector, which has traditionally been a major driver of economic growth. New-home prices have been declining for three years, and the struggles of Evergrande alongside other major developers such as Country Garden, Vanke, and Kaisa have eroded consumer confidence in the housing market. According to economist Alicia Garcia-Herrero of Natixis, Evergrande's crisis exposed structural weaknesses in the system. Analysts note that China faces multiple headwinds in residential real estate, including stagnant household incomes and a contracting population, at a time when economists argue the economy must shift toward consumption-driven growth.
