Living on the edge: Evergrande founder Xu Jiayin's rise to riches
Xu Jiayin (also known as Hui Ka Yan in Cantonese) faces, at 62, one of the crucial moments of his existence. He was a poor peasant who became part of the elite of Chinese billionaires, but now his giant construction company, Evergrande, faces the danger of bankruptcy. Who is Xu Jiayin and what are his origins? And how much money does he have?
Forbes magazine ranked him the richest man in China in 2017, which meant he surpassed even the mighty Jack Ma of Alibaba. The publication estimated his fortune at 45 billion dollars. Today, it is lower, due to the recent losses with Evergrande, and amounts to a 'mere' 10 billion.
Xu Jiayin was born in 1958 in Henan Province. Those were the years when Mao Zedong (pictured here with Soviet leader Nikita Khrushchev) ruled China with an iron fist. The family of Xu Jiayin had to make do in a period of famines caused by Mao's failed economic plan of the Great Leap Forward.
Xu Jiayin's father was a veteran who had fought against the Japanese. His mother died when he was 8 months old. Jaiyin was mostly raised by his grandmother.
Xu Jiayin was a boy from a peasant family who dreamed of going to the big city. His desire, as he himself has said, was "to eat better" and leave the hunger and hardship behind. He more than succeeded.
With the goal of prosperity, Xu Jiayin worked hard to get a degree. While running shifts in a cement factory, he attended university where he studied Metallurgy. The places where he worked immediately recognized 'Boss' Xu's leadership.
In the 90s, the ambitious Xu Jiayin managed to get work in a Chinese city where everything was changing at the time. Shenzhen was a 'laboratory city' of the country's new economic policy, the first Special Economic Zone in which certain rules of capitalism were allowed to operate under the supervision of the Communist Party.
Just five years after arriving in Shenzhen, Xu Jiayin managed to found his own company: Evergrande. Its core activity, construction, was a success story in a country in full expansion.
One key to the growth of Evergrande was Xu Jiayin's excellent relationships with other millionaires. He joined an informal club of tycoons meeting regularly to play 'Big Two', also known as 'Chinese Poker'. Apart from gambling monstrous amounts, he also obtained financing for his projects in this exclusive 'Poker Club,' financial reporters claim.
According to the economic press, other Chinese potentates in that 'Big Two club' were Joseph Lau (Chinese Estates), Henry Cheng (New World Development) and Cheung Chung-Kiu (Land Holdings).
(Image: Amanda Jones / Unsplash)
Some explain Evergrande's ability to obtain credits (accumulating a debt of up to 300 billion dollars) by Xu Jiayin's card games. The magnates in his circle supported each other by buying bonds and stocks, thus injecting a liquidity into each other's businesses that enabled them to get more credits.
Xu Jiayin loves soccer. He used to do business with Real Madrid (pictured here in 2011) and he also has his own team: Guangzhou Football Club.
What has been Xu Jiayin's relationship with the all-powerful Chinese Communist Party? The businessman has shown his support for the party and was always close to Zeng Qinghong, the former vice president of China (in the image next to President Xi Jinping). Again, Xu Jiayin's ability to build useful relationships is clear.
While on the one hand facing financial problems due to accumulated debts, Xu Jiayin faces on the other hand a change in the Communist Party's policy. Political analysts speculate that President Xi Jinping increasingly regards millionaires as threats rather than assets. They say he wants to limit their power. Making Evergrande fall might be part of that strategy.
For now, Xu Jiayin perseveres. Evergrande's debts suffocate him but he has taken a breath by selling some of the company's properties and obtaining a few billions to placate the creditors. In addition, there have been signs of a takeover bid for part of the company, leading to a halt to Evergrande's shares on October 4th. The fear of a global crisis, which could result from the fall of this real estate giant, has slightly diminished though not dissipated.
Xu Jiayin has written a letter to encourage his 120,000 employees. "I firmly believe that Evergrande employees never yield, are never defeated, and only grow stronger in adversity," he writes. In addition, 'Boss Xu' assures: "If we continue to fight, and persevere through this struggle — we will walk out of the darkness soon."
Given his spectacular fortune, Xu Jiayin is unlikely to fall back to the poverty of his childhood. But if Evergrande falls, his splendour as a successful businessman may end. Either way, Xu's story has been and will remain an inspiration for many poor Chinese people who hope to build a better future.