Four Chinese Entrepreneurs Recently Jump to Their Deaths – Is China’s Economy Crashing?

Chinese entrepreneurs suddenly jump to their deaths.  Is this random or an indication of a failing Chinese economy?

Having worked in Hong Kong for nearly a decade, the story of the rise and fall of property management company Evergrande intrigued me.  The fall of this once grand company was historic. 

Back in August of 2023 I wrote:

The China economy is in trouble, like the rest of the world’s economies.  The Evergrande failure has been in the works for some time now.  Once one of the most prestigious firms in China, it’s now facing bankruptcy.

China’s Economy Falling Apart – Billionaires Want Out – Bankrupt Property Management Company Evergrande Replaces CEO

China’s Evergrande Files for Bankruptcy – World Economy in Dangerous Shape

Before that I was on the War Room with Steve Bannon to discuss the fall of the China economy and Evergrande in October of 2021:

If not coming, it’s already here, Steve.  [Joe’s response to Steve Bannon’s question about a financial crisis coming to China.]…

The problem that China has is similar to 2008, it’s the same problem.  They overbuilt real estate and they’re aren’t people in the real estate that can afford it and can live in it.  So they have all this property, it’s a real estate crisis, all this property that is setting all over the place, all over the country, that has been built but there’s just nobody in it…

In January of 2024 Evergrande was in full default.

Evergrande was once China’s top real estate developer, but ever since it defaulted on loans in 2021 the company has been in a kind of slow-motion collapse. With more than $300 billion in debts and contractors who hadn’t been paid, there seemed to be no way for the company to recover.

The central problem at Evergrande (and other, similar developers) seems to be that it was using current deposits on as-yet-unbuilt apartments to cover the costs of building apartments it had already been paid for. That kind of ponzi scheme obviously doesn’t work when no one is willing to risk more money (placing an order for a future project) because the company has defaulted on a loan. Finally, today, a judge in Hong Kong called it a lost cause and ordered the company to dissolve so its assets could be sold.

But there’s a catch here and it’s a fairly huge one. The judge who ordered the liquidation is in Hong Kong. Most of the company’s assets are in mainland China. The way this is supposed to work is that a mainland judge is supposed to take up the order and make sure it gets carried out. But you’ll be shocked to learn that it doesn’t actually work that way in China very often.

All of that is a nice way of saying that the order to liquidate assets may dray on for years or may just be ignored. Honestly, it’s hard to imagine a worse outcome for China’s economy. The collapse of Evergrande is bad news but at least its dissolution is a familiar outcome to foreign investors who expect this to happen to failed companies. Also, it would allow some of them to recoup at least a portion of their losses.

But if politics intervenes and Evergrande’s mainland operation isn’t dissolved after a court order, suddenly investors realize how little confidence they can have in China, not to mention that won’t be getting any of their money back.

There is now more negative news on the Chinese economy. 

According to the Epoch Times, top entrepreneurs from four different companies recently “committed suicide” as their companies were failing economically.

In the span of just four months, four prominent Chinese entrepreneurs from multiple industries have committed suicide, all reportedly jumping from buildings in desperate final acts. Experts say that these incidents stand in stark contrast to the Chinese regime’s official narrative of “better-than-expected” GDP growth for the first half of the year.

On June 2, Liu Wenchao, chairman of Xizi Elevator Co. Ltd., a firm heavily reliant on China’s now-floundering property sector, died after falling from a building. Chinese state-controlled media said that Liu once said that anyone who has ambition ends up scarred.

On July 17, Zeng Yuzhou, founder of home renovation chain Liangjiaju Building Materials, jumped from a high-rise in Guangzhou. He left behind a 1 billion yuan ($140 million) mess, affecting over 2,000 families, more than 1,000 employees, and over 300 suppliers, according to Chinese media.

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