Is Xu Jiayin, the founder of Chinese real estate giant Evergrande, a genius businessman? And did the Communist Party of China (CPC) sabotage him simply because his power became too great? Or is he a charlatan who had too easy access to unsecured loans precisely because of his ties to CPC leaders?

Xu is not as well known as CEO Jack Ma of online store Alibaba, but he is to the real estate sector what Jack Ma is to high-tech. Xu Jiayin, also known by his Cantonese name Hui Ka Yan, is both the founder and major shareholder of Evergrande. That company is now on the brink of collapse, because it has debts worth more than 250 billion euros. In order to pay it off, it is now trying to sell parts of it. So far with little success. If Evergrande does indeed fall, it could have major consequences for both the Chinese and the international economy.

Who is Xu, who runs the ailing Evergrande? Like Jack Ma, the Chinese is a super-rich private entrepreneur. In 2017, business magazine called Forbes even made him the richest man in China. At the time, he had an estimated net worth of 45.5 billion dollars (39 billion euros).

Xu is a selfmade man. He is not part of the so-called ‘red elite’: the privileged group that has access to the highest echelons of the Party through kinship.

Xu likes to be called Hui Ka Yan. This makes it sound like he’s a Hong Kong tycoon

Xu likes to be called Hui Ka Yan. That way it sounds like he’s a Hong Kong tycoon, and that worked for a long time status-boosting in China. Hui Ka Yan is the Cantonese pronunciation of the characters that make up his name, and in Hong Kong they speak Cantonese.

But Xu isn’t actually from prosperous Hong Kong. He was born in 1958 to a farming family in a village in the poor central Chinese province of Henan. Chinese media report that he lost his mother to blood poisoning at the age of one and was raised by his grandmother.

Xu initially failed his college entrance exam, but later passed after focusing on nothing else for five months. He went to study at the then Institute of Iron and Steel in the central Chinese city of Wuhan, the city that became internationally known mainly after the first corona outbreak. After graduating, he rose to the top rank of the steel company where he was appointed.

But Xu wanted more. After the then Chinese leader Deng Xiaoping gave the signal in 1992 for the opening up of China to the West and to the use of capitalist production methods, many Chinese seized the opportunity to set up their own private company. Xu did that too. He moved to the southern Chinese city of Shenzhen, close to Hong Kong, where the rules for private entrepreneurs were much freer than in the rest of China. There he started Evergrande in 1996, then only a real estate developer.

The 1990s and early 21st century were the years of great growth for the Chinese economy. Many people moved from the countryside to the city. There were many young people of marriageable age, land and house prices rose. The economy often grew by more than 10 percent per year. It was easy to earn money with real estate: everyone wanted to buy one or more houses, not only to live in, but also to invest.


For Xu, it was tempting not to pay off his loans with the money he earned from selling real estate, but to put it into new projects – also in areas other than real estate. In this way he hoped to earn even more money as soon as possible.

When the company had grown so strong that it wanted to go public in Hong Kong, it approached the Swiss investment bank Credit Suisse. An analyst at that bank at the time remembers how she prepared a report on Evergrande’s financial position in 2007. “I saw that their figures were not correct at all,” she says from Hong Kong via an image connection. Her main objection was that the accounts were so opaque that they could not be tied down.

Also read: Why does the Chinese Evergrande have such an impact on the international stock markets? And four other questions

Her analysis was wrong. “I got a warning from one of our bankers. He had spoken to Xu, who had said to him, “You have to tell your analyst not to be so negative about my company. Otherwise it will be dangerous for her.’”

The analyst, whose name is known to the editors, only wants to tell the story anonymously for fear of repercussions. She was often at the talk he gave to educate analysts about Evergrande. “He wanted to be addressed by his Hong Kong name and his doctorate,” she says – Xu received (or bought) an honorary doctorate in 2008 from the little-known American University of West Alabama.

Getting bank loans in China is especially helpful if the banks think you have political backing. Xu is said to be good friends with the brother of China’s former president Wen Jiabao. In 2001, that brother bought 16 percent of the shares of Evergrande.

Xu took advantage of the housing boom since Evergrande’s inception by leasing untapped land from local governments to build mega-projects for which he charged buyers the entire purchase price up front.

Xu also reportedly became ties to Zeng Qinghong, a former vice president. For example, in 2014 Xu bought a villa in Australia for $ 39 million, near the villa of Zeng’s son. He was allowed to use Xu’s villa for free while his own villa was being renovated.

‘Poker Club’

Xu was a member of the so-called ‘poker club’, a group of four very wealthy friends who not only play poker together, but also lend money to each other. It would involve at least $16 billion in transactions between the four in the past ten years. All four friends are real estate billionaires.

One of them, the Hong Kong woman Joseph Lau, was sentenced in 2014 to more than five years in prison in the former Portuguese territory of Macau. For the purchase of a piece of land, he had paid more than 2 million euros to the highest official in charge of public works in Macau. He never ended up in prison because Hong Kong has no extradition treaty with Macau.

Lau has supported Xu through thick and thin so far. Still, he recently largely withdrew from Evergrande, a sign that the ship, at least in its current form as a mega-corporation, now appears to be sinking.

A version of this article also appeared in NRC Handelsblad of 30 September 2021

A version of this article also appeared in NRC in the morning of September 30, 2021