Power Players: Evergrande and the unraveling of China’s property boom

**Will Bain** (0:00)
He was once China's richest man, with a personal fortune in excess of $45 billion, and someone who played poker with the biggest names in Chinese business, bought a footballer for an Asian record transfer fee, and attended events in a luxury belt with a gold buckle. He now faces life in prison. So today on Power Players from Business Daily, the spectacular rise and incredible implosion of Hui Ka-yan and his Evergrande property empire, and how their story still weighs on the global economy.
Yeah, welcome back to the programme. I'm Will Bain here at BBC HQ in the UK.

**Rahul Tandon** (0:34)
And I'm in another BBC studio, Rahul Tandon, here in the north of England.

**Will Bain** (0:39)
And joining us from Beijing today to work through this extraordinary story is Jennifer Pak, China correspondent for our colleagues at NPR in the United States. Thanks for being with us, Jennifer.

**Jennifer Pak** (0:49)
Thanks for having me.

**Will Bain** (0:50)
This story's really got a bit of everything, isn't it?

**Jennifer Pak** (0:52)
Yeah, it's sexy, isn't it? Real estate has never been this sexy.

**Will Bain** (0:56)
Yes, it's certainly got glitz, glamour, collapse. It's also, Rahul, got a good deal of personal hubris in it, but also really big business consequences, not just in China, but actually around the world still.

**Rahul Tandon** (1:08)
I think huge. The story of our time for all three of us has been the growth of China's economy. It is extraordinary, isn't it? I was looking at some figures in 1974, China, 2% of global output, now 22%.
It has driven the global economy over the past two decades. When things go wrong in China, wherever you're listening to this at home, it has an impact on your economy and your life as well.

**Will Bain** (1:31)
Yeah, Jennifer, but why don't we start by going backwards a little bit if we can, right back to the start. Hui Ka-yan, you followed his career throughout. Tell us a bit about him, where he came from.

**Jennifer Pak** (1:42)
So Hui Ka-yan, that's the Cantonese romanization of his name, but he's also known here in the mainland as Zhujia Ying. He came from the country side. He went from rags to riches and became one of the wealthiest men in the country. In 1996, he founded this company, Evergrande. At that time, it was the start of the housing boom. China's economy was really starting to shift from a fully state-planned economy to a more mixed one.
Part of that was allowing people to buy private property.
At the time, investment options were quite limited, and a lot of people just felt this was a safe bet. From there on, we went on for decades, up until 2021, where the prices only went up. Everybody, whether they were home builders, home buyers, overseas bondholders, everybody bought into this idea that home prices only went up.

**Will Bain** (2:35)
It was all on the back of this opening up of the Chinese economy, these special investment zones. The government was basically pushing people like Mr. Hui to try and create companies like this.

**Jennifer Pak** (2:46)
Well, absolutely. I mean, what he did was no different. He would go into these smaller areas. He would pick prime land and he would pay top dollar for it. It didn't matter what price it was because he knew eventually he was going to be able to sell it. And I have to tell you, I went to one of their property developments out in Chongqing in southwestern China. I mean, now it's abandoned, but some of these sales offices that people went into, like one was a French Baroque architecture. The other one was for Phase 1 Phase 3 was like a Disney type castle. Like it was insane. So these are the types of places that people were walking into to buy property, to see the floor planning of these apartments. Like you just could not imagine how spectacular this whole industry was.

**Will Bain** (3:30)
And Rahul, he was the type of person that they wanted in modern China too. The type of businessman they wanted to kind of rags to riches kind of.

**Rahul Tandon** (3:37)
I think that's the story of him, isn't it? You know, we love that story, the person who comes from that background, difficult background, which he did. He was brought up by his grandmother, wasn't he? His father was a woodcutter. He worked in the steel industry. How does somebody like that go to be China's richest man? It is an incredible story. You need huge determination. You need charisma in a country like China. You need to be pretty political as well and be able to get on with some of the people who are running the country. And he did all of those things. We wanted to get a little insight into what he was like. So I've been speaking to someone who knew him pretty well, Desmond Shum, who with his wife was also a property developer in China.