## China Evergrande Group Delisted From hong Kong Exchange, Marking End of an Era
An Evergrande commercial complex in Beijing on Jan. 29, 2024.
Greg Baker | Afp | Getty Images
China Evergrande Group was delisted from the Hong Kong Stock Exchange on Monday – an ignominious exit for the former high-flying developer that once epitomized Beijing’s economic rise adn later came to symbolize the country’s property bust.
Following its listing in 2009, Evergrande had become one of China’s hottest stocks, with the company’s market cap peaking at $51 billion in 2017. Trading in the company’s shares had been suspended since January 2024 when it received a liquidation order, with its market value falling to just above $280 million, according to LSEG data.
Evergrande, once China’s largest developer by sales, will now be remembered as the world’s most indebted developer with more than $300 billion in debt and whose default set off a broader years-long crisis that has weighed on the country’s economic growth.It was one of the earliest developers that faltered after Beijing rolled out its three-red-line policy in 2021.The policy, aimed at reining in aggressive borrowing, triggered a sector-wide liquidity crisis.
## Deflating property bubble
Evergrande’s unwinding in the aftermath of its collapse unfolded during a protracted property slump, though analysts expect the drag to ease in the years ahead.China’s housing downturn has stretched into a fourth year, with prices, sales, investment and construction activity faltering across the board.
New home prices in China fell at the fastest pace in eight months in June, dropping 3.2% year on year before recovering slightly to a 2.8% drop in July, while the decline in real-estate-related investments deepened.
“China’s property bubble peaked in 2021 and has been deflating since,” saeid Andy Xie, an autonomous economist based in Shanghai. He pointed out that sales volume of new residential properties has halved over the four years. Prices have also halved in smaller cities and major cities’ suburbs and fallen by as much as 30% in central areas of tier-1 cities, the economist pointed out.
“The adjustment isn’t over. But the economy has absorbed most of the impact already,” Xie added.
“China’s housing market correction remains an ongoing headwind, though we are forecasting less of a drag over the next few years,” said Changchun Hua, chief economist for Greater China at KKR, estimating a smaller dent of 1.5 percentage point on China’s gross domestic product in 2025, compared with 2.5 percentage points in 2022.
That impact will continue to ease to just 0.3 percentage point by 2027, according to Hua’s estimates.
At a high-level policy meeting last week, Chinese Premier Li Qiang emphasized the need for more effective measures to address the property market and stabilize market expectations. China’s property and construction sector accounted for more than a quarter of China’s GDP prior to Beijing’s crackdown on developers’ excessive debt in 2020.
On Monday, the Shanghai
Evergrande’s Liquidation Reveals Larger-Than-Reported Debt, Dim Prospects for Investors
Table of Contents
The ongoing liquidation of Chinese property developer Evergrande has uncovered a considerably larger debt pile than previously disclosed, raising concerns for overseas investors and signaling limited recovery prospects. Liquidators now estimate Evergrande’s debt at $45 billion, substantially exceeding the $27.5 billion reported in the company’s 2022 financial disclosures [https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0812/2025081201148.pdf]. This revelation underscores the complexities of investing in the Chinese market and highlights the risks associated with opaque financial reporting.
Unveiling the True Scale of Evergrande’s Debt
evergrande, once China’s second-largest property developer, defaulted on its debt in late 2021, triggering a crisis in the country’s property sector. The company has been undergoing liquidation proceedings in Hong Kong, aiming to untangle its vast financial web. The latest findings from the liquidators reveal a debt burden far exceeding initial estimates.
The $45 billion figure represents a notable increase from the $27.5 billion disclosed in Evergrande’s 2022 financial statements. This discrepancy raises questions about the accuracy of the company’s previous reporting and the challenges faced by liquidators in assessing the full extent of its liabilities [https://www.reuters.com/markets/asia/china-evergrande-liquidators-say-255-million-assets-have-been-sold-2025-08-12/]. While $255 million in assets have been sold as of August 12, 2025, according to Reuters, the recovery of funds for creditors remains uncertain.
Limited Recourse for Overseas Investors
The situation is especially bleak for overseas bondholders and shareholders. Experts predict they are likely to receive minimal, if any, returns on their investments.Macrolens’ McCarthy emphasizes the limited legal recourse available to foreign investors: “For overseas investors investing in China through Hong Kong, you have limited recourse to onshore assets if things go bad.”
This lack of access to Evergrande’s mainland Chinese assets – where the bulk of its holdings reside – significantly diminishes the chances of recovery.The Chinese legal system and regulatory habitat often prioritize domestic interests, making it difficult for foreign creditors to effectively pursue claims.
Understanding Liquidation and its implications
Liquidation is a legal process where a company’s assets are sold off to pay its debts. It’s typically a last resort for companies facing insolvency. In Evergrande’s case, the liquidation process is complicated by its international reach and the complex structure of its debt. the process involves:
Asset Identification: Identifying and valuing all of Evergrande’s assets,including property developments,land holdings,and financial investments.
Asset Sale: Selling these assets to generate funds.
Debt Repayment: Distributing the proceeds to creditors according to a pre-defined order of priority. Secured creditors (those with collateral) typically receive payment before unsecured creditors (like bondholders).
Dissolution: Once all assets are sold and debts are paid (or as much as possible),the company is formally dissolved.
Key Takeaways
Evergrande’s actual debt is $45 billion, significantly higher than the $27.5 billion previously reported.
Overseas investors are likely to face considerable losses, with limited avenues for recovery.
The case highlights the risks of investing in Chinese companies, particularly regarding financial transparency and legal recourse.
The liquidation process is complex and will likely take years to complete.
Looking Ahead
The Evergrande saga serves as a cautionary tale for investors considering the Chinese market. Increased scrutiny of financial reporting and a greater understanding of the legal landscape are crucial for mitigating risk. The ongoing fallout from Evergrande’s collapse is also likely to have broader implications for China’s property sector and its overall economic growth. The situation will continue to be closely monitored by global financial markets as the liquidation process unfolds.