The rumblings and rumors of viability have been floating around for the past three years. Still, the world was not prepared for the scale of the economic earthquake that struck in September with the arrest of Xu Jiayin, Chairman of the Board of Directors of the mammoth Evergrande Group. It is not an exaggeration to say that this is just the beginning stages of the earthquake.
The Richter Scale may not be the only thing shattered in the quake’s aftermath, but the entire world economy may be left in ruins. The implications are profound and far-reaching. The Evergrande crisis is a flock of canaries in the proverbial coal mine.
The Chinese regime faces a monumental challenge and may not have the technical or financial know-how to contain or address the crisis. In that case, the Chinese people are in grave danger; the world knows all too well what happens to the people when a Communist regime cannot pay its bills.
Xu Jiayin was the perennial star of the CCP firmament, proclaimed “National Model Worker” and “Outstanding Builder of Socialism with Chinese Characteristics,” and topped the Outstanding Private Entrepreneurs list. He once wielded infinite wealth and glory. Xu was taken into police custody in September and overnight became a prisoner on suspicion of violating the law and committing crimes.
Evergrande: A structural pillar of the Communist Party of China (CCP)
On August 23, 2002, Evergrande took the lead in establishing its own Party Committee, the first private enterprise to do so in Guangzhou, with Xu Jiayin, Chairman of the Board of Directors, concurrently serving as the Secretary of the Party Committee. By 2019, the Evergrande Party Committee grew from 6 Party branches with more than 100 Party members in the initial stage to 1,133 Party branches, managing 12,075 Party members.
Xu Jiayin was well-versed in the officialdom and the power structure of the CCP. He grabbed all power positions for himself, insisting that the leader is the Party Committee’s secretary, Special Deputy Secretary of the Party Committee, the Secretary of the Discipline Inspection Commission, and at the same time, the executive director and vice president.
As the Secretary of the Evergrande Party Committee, Xu Jiayin became a “National Model Worker” in 2005, an “Outstanding Builder of Socialism with Chinese Characteristics” in 2006, and won the “China Charity Award” for eight consecutive years since 2011. In 2018, he won the title of the “Top 100 Outstanding Private Entrepreneurs” in the 40 Years of Reform and Opening-up.
Evergrande and the corrupt role of the Party apparatus
The world’s most indebted real estate developer in history
By the end of 2023, the mountain of debt will have reached 2.4 trillion Yuan (US$0.33T). By comparison and based on calculations, it is said that this is equivalent to China’s annual debt of 600 million Yuan (US$84M) from the beginning of the Xia Dynasty to 2023. In 2021 and 2022, Evergrande lost 800 billion Yuan (US$112.42B) within those two years, with an average loss of 50 million Yuan per hour (US$7.02M). The scale of Evergrande’s massive debts and huge losses may be unprecedented!
The decadent and indulgent lifestyle of Xu Jiayin
Xu Jiayin’s land, sea, and air transportation acquisitions are decadent. He owns four private jets; among those are the Airbus ACJ330 and the Airbus ACJ319, of which the Airbus ACJ330 is priced at US$220 million, a Dutch-designed luxury yacht with a market price of about US$60 million, and two Rolls-Royce Phantoms with a price of 8 million to 10 million Yuan (US$1.12M to US$1.41M) each.
Xu owns several luxury homes in Hong Kong, Beijing, and the United States. He once bought the most expensive mansion in Central Hong Kong for US$930 million, setting a record for the most expensive residence in the world.
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