Property tycoons, who were recognized as the primary engine of the Chinese economy while displaying immense triumph just a few years ago, have now fallen into a state of anxiety for fear of punishment, evoking a profound sense of change over time. In fact, it is reported that many of them will soon be dealt with under China's notoriously harsh laws. To put it somewhat harshly, it would not be an exaggeration to say they have been reduced to a state where death would be preferable to life.

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Former Evergrande Chairman Hui Ka Yan was sentenced to life imprisonment in a trial held on the 20th. It appears unlikely that he will ever leave prison alive. / The Beijing News

Comprehensive reports from media outlets including The Beijing News indicate that China's real estate industry could well be described as having acted as a veritable colossus for nearly three decades since the end of the last century. This was understandable given that it stepped up as a relief pitcher to immediately deliver economic stimulus whenever the economy faltered, playing a massive role.

Naturally, negative side effects steadily accumulated one after another during this process. Typical examples included reckless development ignoring supply-and-demand principles, rampant illicit loans involving kickbacks, and tyrannical behavior by many corporate owners rivaling that of emperors. In short, it was fair to say that moral hazard was pervasive across the entire industry. The immense bubble that built up across the sector was a natural consequence.

Given the continuous warnings issued by conscientious economists, it would have been surprising if the bubble had not burst. Eventually, it did. In the second half of 2021, Evergrande, the industry's undisputed top developer, defaulted after failing to handle an astronomical debt of no less than 2.4 trillion yuan (about 496.8 trillion won). Subsequently, all kinds of corrupt practices committed by founder and former Chairman Hui Ka Yan (68) and the company were inevitably revealed in detail.

This is evident from the numerous charges brought to light when former Chairman Hui was sentenced to life imprisonment at his first trial on the 20th at the Shenzhen Intermediate People's Court in Guangdong Province, about three years after being detained in September 2023. The list of charges is extensive, including illegal fundraising from the public, fraudulent fundraising, illicit lending, fraudulent issuance of securities, violation of mandatory disclosure obligations, illegal fund management, occupational embezzlement, and bribery. It came as no surprise that the court also sentenced him to deprivation of political rights for life and confiscation of all personal property.

The real problem seems to be that Evergrande is not the only company driven into such a corner. This suggests that the circumstances facing owners of other companies are largely no different from those of former Chairman Hui. Prominent examples include founders Wang Jianlin (72) of Wanda, Yang Guoqiang (72) of Country Garden, Wang Shi (75) of Vanke, and Pan Shiyi (63) of SOHO. Without exception, they are shouldering debts around 1 trillion yuan, placing an enormous burden on the Chinese economy.

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Wanda founder Wang Jianlin, who has recently been said to have aged rapidly. He appears to be suffering from severe emotional distress. / The Beijing News

It would be surprising if Chinese authorities stood idly by. Indeed, there is already widespread speculation across the industry that punishment for these figures is merely a matter of time. Given China's judicial reality, where escaping is virtually impossible once the state makes up its mind, such expectations are entirely plausible. For this reason, SOHO founder Pan Shiyi fled early on to the U.S., drawing outrage from judicial authorities. The fact that Wanda founder Wang Jianlin is said to be suffering from extreme emotional distress after recently appearing drastically emaciated and aged seems to have good reason behind it.

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SOHO founder Pan Shiyi, surrounded by rumors of having fled to the U.S. after failing to handle massive debt. / The Beijing News

At one time, figures such as former Chairman Hui and founder Wang received plausible praise as the tsars of the Chinese economy. Today, however, the situation has turned completely upside down. Describing them as facing a living hell would indeed seem to hit the nail right on the head.

                                                                                                           Hong Soon-do