On August 20, 2026, the Shenzhen Intermediate People's Court delivered a first-instance verdict, imposing a combined fine of 8.82 billion yuan on Evergrande Group, a 7 billion yuan fine on Evergrande Real Estate, and sentencing Xu Jiayin to life imprisonment with deprivation of political rights for life and confiscation of all personal assets. The court found him guilty of charges including illegally absorbing public deposits, fundraising fraud, illegally granting loans, fraudulent issuance of securities, unit bribery, and职务侵占. His two sons also received prison sentences.

This verdict marks the conclusion of the Evergrande saga, but the impact of the Xu Jiayin case on China's real estate sector, the broader economy, and household wealth is far from over. Calling this the end of an era for Chinese property would actually underestimate the warning it carries and the lessons it imparts.

A decade ago in 2017, Xu Jiayin topped the Hurun Rich List with 290 billion yuan in wealth, having added 200 billion yuan that year alone. At that time, among China's top five richest individuals, Xu ranked first, Yang Huiyan fourth, and Wang Jianlin fifth—three of the five were tied to real estate. Property tycoons accounted for 14.6% of the entire Hurun Rich List. That was undoubtedly the golden age of Chinese real estate and the pinnacle of Xu Jiayin's career.

Ten years later, Xu has fallen from China's richest man to a life sentence with all personal assets seized. The position of real estate on China's wealth rankings has undergone a seismic shift—property developers have all but vanished from the top 100 on the rich list. So this is by no means just Xu Jiayin's personal story, nor will it end with his life sentence. The rise and collapse of Xu Jiayin and Chinese real estate leave us with far too many warnings to ignore.

The first lesson is to always respect cycles. I have long said that the essence of wealth is cycles—cycles can create wealth, and they can destroy it. For any individual, the primary source of wealth is the cycle, not personal ability. But when the cycle turns upward, many people develop the illusion that their success is entirely self-made. Property prices rise, land values climb, sales scale expands, banks are willing to lend, trusts are willing to provide funds, investors are eager to buy your bonds, and local governments are happy to supply land. As asset prices appreciate, you can use those inflated assets to secure more financing, pile on more leverage, and keep expanding.

At this point, entrepreneurs easily fall into a delusion of omnipotence. Having succeeded in real estate, they believe they can succeed in cars, finance, tourism, or football. Scale grows larger, leverage rises higher, and business lines become increasingly scattered. When the cycle turns downward, these once-arrogant enterprises collapse one by one, watching their leverage crack with no way to respond. During an upcycle, leverage amplifies wealth; when the cycle reverses, leverage becomes a wealth shredder. This is not a rule unique to Xu Jiayin—it is a law proven repeatedly by every asset bubble over the past few centuries. Real estate, stocks, gold, any asset—it applies to all. And it isn't just Xu Jiayin; we've witnessed the near-total wipeout of China's real estate billionaires and the destruction of 70% to 80% of property company market value.

If you interpret everything the cycle gave you as your own capability, you will often face the cycle's harshest punishment. Money earned through a cycle ultimately gets lost through a lack of real skill. Almost no Chinese developer has managed to preserve wealth through this downturn, and the lesson is painfully clear.

The second warning is that in a major real estate correction, nobody wins. The true marker of an era's end is not the disappearance of a single billionaire, but the halt of the wealth machine that created him. As we all know, over the past two-plus decades, real estate has been one of China's largest wealth-generating machines. Rising land prices, climbing home values, urbanization, and financial leverage combined to produce the biggest wave of wealth creation in Chinese history. Developers, the property supply chain, land finance, and homebuyers all felt the immense power of this wealth engine. When it stopped, everyone discovered that the wealth destruction wasn't limited to developers—it didn't just impact land finance or financial institutions; nearly every ordinary household was profoundly affected.

Over the past twenty years, real estate has been the largest asset for Chinese households, commonly estimated at around 70% of household assets. So it's not hard to imagine that when home prices fell, the shock wasn't confined to developers on the rich list—the balance sheets of millions of ordinary families took a massive hit. My personal estimate is that this round of property adjustment has erased between 130 trillion and 160 trillion yuan in Chinese household wealth. The impact on household balance sheets has been comprehensive and deep: falling home prices damage the asset side, making people feel poorer, curbing consumption, reducing household borrowing and investment, weakening monetary policy transmission, and ultimately dragging down the entire macroeconomy. This mutual influence forms a downward spiral, with its amplifying effect on the economy becoming increasingly evident.

The third warning is that handling a real estate crisis tests a nation's capability. Nearly every major global power has experienced a property crisis—the United States, Japan, and many European countries have all been through it. After a property bubble bursts, the hardest problem has never been keeping a few developers alive, but rather preventing falling home prices from turning into household balance sheet deterioration, which then becomes declining consumption, which turns into falling corporate revenue, which becomes deteriorating employment and income expectations—forming a self-reinforcing cycle.

So where Chinese real estate stands today, the real question is no longer whether to rescue this or that developer, but how to complete market clearing as quickly as possible, how to stabilize home prices at a reasonable level, how to protect homebuyers, how to resolve debt, how to repair household balance sheets, and how to prevent the property adjustment from continuing to drag on household consumption and the broader Chinese economy. Since this correction began, I have called for stronger counter-cyclical adjustments to stabilize the market and reduce the shock to household balance sheets, financial institutions, local finances, and the macroeconomy. Many people have attacked me for "cheerleading for real estate." Given what the sector has become, what would be the point of that? This kind of absurd logic spreading widely on the internet is truly lamentable.

But the cost has indeed been enormous. In 2017, Xu Jiayin became China's richest man with 290 billion yuan. Less than a decade later, he received a life sentence with all personal assets confiscated. Placing these two images side by side may be the most striking picture for understanding Chinese real estate over the past ten years. So I refuse to simply call Xu's life sentence the period at the end of a real estate era. Real estate will persist as a pillar industry, and property cycles will return. What's truly worth remembering is not a billionaire falling from grace, but three fundamental truths: First, all wealth must respect cycles. Second, the economic shock of a property bubble bursting is immense—no one emerges as a winner. Third, any nation facing a property bubble collapse must ultimately resolve the problem of ordinary household balance sheets.

Xu Jiayin can be reduced to zero, Evergrande can disappear, and an era's property tycoons can exit the wealth rankings. But the debt left by the property cycle, the shrinkage of household wealth, and the impact on consumption and economic growth will not vanish with a court ruling. A verdict can close the chapter on one man's story, but the final answer to how a nation digests the legacy of a super-sized property cycle has yet to be written.