Residential buildings under construction at Evergrande Cultural Tourism City, a project developed by China Evergrande Group, in Suzhou’s Taicang, Jiangsu province, China, on Sept. 23.
ALY SONG/Reuters
On July 1, as the Chinese Communist Party celebrated its centenary with a grand parade in the capital, Beijing, Hui Ka Yan watched from a position of honour atop the Gate of Heavenly Peace, overlooking Tiananmen Square.
Dressed in a blue blazer, his receding hair dyed the pitch black of China’s elite, Mr. Hui’s prominent presence at the celebration was seen by many observers as a vote of confidence in him and his company, the real estate developer Evergrande. For years, Evergrande had faced questions about its ever-growing pile of debt, which reached US$300-billion this year, but which it had always been able to refinance, shrugging off the barbs of short-sellers and other critics.
In part, this appeared to be due to Mr. Hui’s impeccable political connections. A member of the standing committee of the Chinese People’s Consultative Conference, Mr. Hui was a common sight at official forums and the yearly Two Sessions meeting of China’s rubber-stamp parliament. While known for his extravagant wealth – Mr. Hui has twice topped lists of China’s richest people – he was also lauded in state media for his charity work, speaking of the importance of alleviating poverty and reducing inequality long before Chinese President Xi Jinping launched his “common prosperity” drive this year.
This month, Mr. Hui’s ability to steamroll through seemingly any crisis appeared to come to an end. Markets worldwide plunged on news Evergrande would likely miss several coming interest payments on onshore and overseas bonds, with a further US$37.3-billion coming due within a year. Cassandras warned of a potential “Lehman Moment,” akin to how the collapse of Lehman Brothers presaged the 2008 financial crash in the United States, and pointed to widespread exposure to Evergrande in the Chinese real estate market and banking system.
Evergrande’s president Xu Jiayin, also known as Hui Ka Yan in Cantonese, attends a meeting in Wuhan, in China’s central Hubei province in 2017.
STR/AFP/Getty Images
While it has so far avoided default, Evergrande has hired financial advisers to assess a restructuring, and authorities in Beijing have signalled no intention to bail out the company, including reportedly telling local governments to prepare for its collapse. From being lauded as a visionary entrepreneur and committed anti-poverty campaigner, Mr. Hui now faces the wrath of Chinese regulators, in a systemin which high fliers who return to earth tend to crash down hard.
Hui Ka Yan – also known as Xu Jiayin – was born in Henan, a province in central China, in 1958. The country was just entering the Great Leap Forward, Mao Zedong’s campaign to jump-start industrialization, which ended in disaster, leading to a famine that caused the deaths of an estimated 20 million people.
“I know poverty very well,” Mr. Hui said in a 2018 speech. When he was a little over a year old, his mother fell ill, and with no money to see a doctor, soon passed away, “leaving me half an orphan.” His father, a veteran of the war against Japan turned agricultural worker, was often absent, and Mr. Hui was largely raised by his grandparents.
“In school, all I ate was sweet potato and steamed bread,” he said. “The desks were made of mud tables. When it rained heavily outside, the water would drip on us.”
After graduating high school, Mr. Hui struggled to find work, unable even to find a job “moving bricks for 10
an a month” – less than a dollar. It was 1976, and China had just reopened its universities following Mao’s death and the end of the Cultural Revolution, during which millions of young people were “sent down” to the countryside to learn from the peasants. Mr. Hui threw himself into his studies and was able to pass the college entrance exam.
Following university, Mr. Hui worked in a steel factory, but the days of the “iron rice bowl” jobs were over, as paramount leader Deng Xiaoping launched China’s reform and opening, encouraging markets and liberalizing parts of the country’s economy. Though he was successful at the factory, and was promoted multiple times, Mr. Hui was entranced by the potential opportunities of the New China and soon quit and movedto the southern city ofShenzhen, the flagship of Mr. Deng’s reform campaign, on the border with Hong Kong. In 1996, he founded Evergrande, with just eight employees squeezed into tiny offices in the nearby city of Guangzhou.
A worker walks inside the construction site of a project developed by China Evergrande Group in Beijing, China. Evergrande surfed the growing wave of urbanization and private home ownership, as millions of workers migrated from the interior of China to coastal cities.
CARLOS GARCIA RAWLINS/Reuters
Since the founding of the People’s Republic, property had been tied to employment, with people living in worker dorms and collectives. But in the 1990s, China was beginning to experiment with private home ownership, and Mr. Hui’s new company surfed the growing wave of urbanization, as millions of workers migrated from the interior of China to coastal cities.
Much of this was fuelled by debt, with many real estate developers taking on huge amounts of leverage to build tower blocks quickly, often to very poor standards and, as prices went up, increasingly with an eye to speculators rather than homeowners. This growing bubble became characterized by so-called “ghost cities” – vast developments built in rural China that struggled to convince anyone to occupy them. But empty apartments were also a common sight even in major cities, as speculators and easy borrowing drove home prices ever higher.
When Evergrande listed on the Hong Kong Stock Exchange in 2009, its shares boomed, but it soon became a poster child for what many saw as the increasingly risky Chinese real estate market.
In 2012, short-seller Andrew Left published one of the most pointed criticisms of Evergrande, saying the company was effectively insolvent and accusing it of “accounting shenanigans” and defrauding investors.
“Evergrande is over-leveraged and the company has no margin for error,” Mr. Left wrote in the report.
While the company’s share price dropped 20 per cent as a result of Mr. Left’s claims, it was him, not Evergrande, who was dragged before regulators. In 2016, a Hong Kong tribunal found him guilty of market misconduct and banned him from trading in the territory for five years.
Andrew Left, the founder of Citron Research, published one of the most pointed criticisms of Evergrande, saying the company was effectively insolvent and accusing it of ‘accounting shenanigans’ and defrauding investors.
Brendan McDermid/Reuters
Mr. Left, whose ban ends next month, told CNBC this week that “everything I discussed from leverage to corporate governance turned out to be true, and instead of considering my report [regulators] forced me to spend millions defending myself.”
For many observers, it seemed Evergrande’s ever-growing debt pile and overseas critics simply did not matter. The company continued to start new projects across China, and Mr. Hui grew wealthier and wealthier, becoming in 2017 the country’s richest man.
His new fortune enabled a lifestyle that would have seemed impossible to even the richest Chinese in 1958, let alone poor peasants like Mr. Hui’s family. He bought property around the world, travelled in a private plane, and opened a bank account in the British Virgin Islands, a notorious tax haven. In Red Roulette: An Insider’s Story of Wealth, Power, Corruption, and Vengeance in Today’s China, author Desmond Shum describes going shopping with Mr. Hui for a US$100-million pleasure yacht in southern France.
“[Mr.Hui] envisioned a floating palace to wine and dine officials off China’s coast, away from the prying eyes of China’s anti-corruption cops and its nascent paparazzi,” Mr. Shum writes, adding of the price tag that “dropping this type of money among these jet-setters had become, if not routine, at least not totally out of the ordinary.”
Throughout his rise, Mr. Hui also gave large amounts of money to charity, topping several annual lists as the country’s most generous benefactor, and he invested in anti-poverty work, first in his native Henan and then nationwide. In speeches, he urged other entrepreneurs to give back, earning him laudatory coverage in Chinese media.
In his public appearances, Mr. Hui was also careful to pay homage to theCommunist Party, without which, he said, his success would not have been possible.
Mr. Hui’s prominent presence at the Chinese Communist Party’s centenary celebration was seen by many observers as a vote of confidence in him and his company,.
Ng Han Guan/The Associated Press
Had the Party not reopened the universities, “I would not have been able to leave the countryside,” he said in 2018. “Without the 14 yuan per month [government] bursary, I would not have been able to finish university. And without the country’s wise policy of ‘reform and opening up,’ there would be no Evergrande today. Therefore, everything the company and I have was given by the Party, the state and the society.”
Mr. Hui’s political adeptness went beyond flowery speeches, and he cultivated close ties first with officials in Guangdong province, where Evergrande was headquartered, and later in Beijing and throughout China, enabling the company to achieve a level of nationwide success that other companies have not.
“If you look at a lot of other real estate developers, even the big ones, they tend to be a lot more geographically focused,” said David Yu, a cross-border finance and investing expert at NYU Shanghai. “And that’s because to grow you have to have good relationships with the local government to win the land, to win approvals and all the other steps.”
According to Cercius Group, a Montreal-based intelligence firm that specializes in Chinese politics, Mr. Hui developed close ties to Zeng Qinghong, a one-time vice-president of China and close ally of Jiang Zemin, president from 1993 to 2003, during whose tenure the country’s real estate market really took off. Other reports have linked him to the family of Wen Jiabao, who served as China’s premier from 2003 to 2013.
In Red Roulette, Mr. Shum said Mr. Hui was acquainted with Zhang Peili, the premier’swife, and describes how, following a dinner between Mr. Hui, Ms. Zhang and Whitney Duan, Mr. Shum’s wife, the real estate magnate casually purchased two US$1-million rings at a Beijing jewellery store. Ms. Duan refused a ring, her husband said, and it’s not clear who Mr. Hui eventually gave the rings to.
“In China, there are several ways to get the attention of those in power,” Mr. Shum writes. “[Mr.Hui’s] preferred method was through giving outrageously expensive gifts.”
During this time, Mr. Hui also expanded Evergrande’s footprint beyond property, taking stakes in entertainment ventures, a mineral water brand, electric vehicles and Guangzhou FC, which Mr. Hui’s company co-owns with Alibaba Group Holding Ltd., the e-commerce giant founded by Jack Ma. In a speech earlier this year, Mr. Hui said that the “New Evergrande” had arrived, after the company “completed the transformation from real estate to multi-industry and digital technology.”
An aerial view from a drone shows the sprawling expanse of Evergrande City in Wuhan, Hubei Province, China. Mr. Hui expanded Evergrande’s footprint beyond property, taking stakes in entertainment ventures, a mineral water brand, electric vehicles and more.
Getty Images/Getty Images
Another of Evergrande’s projects, the under-construction Guangzhou Evergrande football stadium in Guangzhou in China’s southern Guangdong province.
STR/AFP/Getty Images
This expansion, as before, was driven by further leveraging the company, with Evergrande accumulatingsome US$300-billion in debt by the start of this year. As long as Evergrande could continue raising money however, relying on strong relationships with state-owned banks and private funders, as well as overseas bondholders, Mr. Hui could continue to surf – in China at least – on a reputation as a genius entrepreneur, and one who spoke of the need to tackle inequality and give back to the poor.
“Authorities from small, lower-tiered cities would be intoxicated by [Mr.] Hui and his very visible political correctness and connections – welcoming his development projects and proposals with open arms,” market analyst Shuli Ren wrote this week. “Warnings fell on deaf ears – and the developer-turned-conglomerate went on living out its nine lives.”
Some of this public perception played directly into Evergrande’s success, particularly when it came to selling consumer investment products and signing up people for new property developments. In multiple reports this week, retail investors spoke of believing the company simply could not default, owing to its political connections and reputation. This encouraged people to purchase products promising outlandish returns, with the assumptionthe investments were a safe bet.
Christina Xie, who works in export in bustling Shenzhen, told Reuters she had pumped her life savings into Evergrande investment products.
“I was planning to use it for me and my partner’s old age. I worked day and night saving, now it’s game over,” said Ms. Xie. “Evergrande is one of China’s biggest real estate companies … my consultant told me the product was guaranteed.”
Mr. Yu, the NYU Shanghai professor, said “China, and Asia in general, are driven by these charismatic, aggressive entrepreneur founders.”
“Evergrande have been very, very successful over a good amount of time, they’re not an overnight success,” he added.
In multiple reports this week, retail investors spoke of believing the company simply could not default, due to its political connections and reputation.
Bobby Yip/Reuters
But Mr. Yu saw in the company’s shift from its core product to other areas a level of hubris that might have led Evergrande to overextend itself, leading to the apparent unravelling this week.
Certainly, for all his political adeptness, Mr. Hui does not seem to have perceived, or believed he could ignore, a shifting regulatory landscape, as Mr. Xi called for an end to real estate speculation and ordered companies to avoid overleveraging.
Last year, the Chinese government introduced three “red lines” for property developers, requiring them to keep debt levels within reasonable bounds. Evergrande was in breach of all three, and soon found itself unable to raise more capital, even at one point reportedly approaching staff to loan the company money.
Two months after Mr. Hui appeared on the Tiananmen rostrum, rubbing shoulders with China’s most powerful people, his company was facing default, lambasted around the world as a potential second Lehman Brothers that could bring down not just the Chinese economy, but also the global one.
“I don’t understand why [Mr. Hui] is still standing,” said Anne Stevenson-Yang, co-founder of J Capital Research and an expert on Chinese companies. Pointing to evidence that some negative stories about Mr. Hui were being censored on the Chinese internet, she said it was unclear why Mr. Hui’s political cache was “so particularly strong.” Despite this, Ms. Stevenson-Yang said, in normal circumstances with a scandal like this, “you would expect him to end up in jail.”
For all the criticism and doomsaying in the past week, however, Mr. Hui has remained bullish, promising in a statement that, sooner rather than later, “Evergrande will emerge from its darkest moments.”
Alexandra Li and Reuters contributed to this report.
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“Communication is one of the most important skills you require for a successful life.” — Catherine Pulsifer, author.
I’m one hundred percent in agreement with Pulsifer, which is why my evaluation of candidates begins with their writing skills. If a candidate’s writing skills and verbal communication skills, which I’ll assess when interviewing, aren’t well above average, I’ll pass on them regardless of their skills and experience.
Why?
Because business is fundamentally about getting other people to do things—getting employees to be productive, getting customers to buy your products or services, and getting vendors to agree to a counteroffer price. In business, as in life in general, you can’t make anything happen without effective communication; this is especially true when job searching when your writing is often an employer’s first impression of you.
Think of all the writing you engage in during a job search (resumes, cover letters, emails, texts) and all your other writing (LinkedIn profile, as well as posts and comments, blogs, articles, tweets, etc.) employers will read when they Google you to determine if you’re interview-worthy.
With so much of our communication today taking place via writing (email, text, collaboration platforms such as Microsoft Teams, Slack, ClickUp, WhatsApp and Rocket.Chat), the importance of proficient writing skills can’t be overstated.
When assessing a candidate’s writing skills, you probably think I’m looking for grammar and spelling errors. Although error-free writing is important—it shows professionalism and attention to detail—it’s not the primary reason I look at a candidate’s writing skills.
The way someone writes reveals how they think.
Clear writing = Clear thinking
Structured paragraphs = Structured mind
Impactful sentences = Impactful ideas
Effective writing isn’t about using sophisticated vocabulary. Hemingway demonstrated that deceptively simple, stripped-down prose can captivate readers. Effective writing takes intricate thoughts and presents them in a way that makes the reader think, “Damn! Why didn’t I see it that way?” A good writer is a dead giveaway for a good thinker. More than ever, the business world needs “good thinkers.”
Therefore, when I come across a candidate who’s a good writer, hence a good thinker, I know they’re likely to be able to write:
Emails that don’t get deleted immediately and are responded to
Simple, concise, and unambiguous instructions
Pitches that are likely to get read
Social media content that stops thumbs
Human-sounding website copy
Persuasively, while attuned to the reader’s possible sensitivities
Now, let’s talk about the elephant in the room: AI, which job seekers are using en masse. Earlier this year, I wrote that AI’s ability to hyper-increase an employee’s productivity—AI is still in its infancy; we’ve seen nothing yet—in certain professions, such as writing, sales and marketing, computer programming, office and admin, and customer service, makes it a “fewer employees needed” tool, which understandably greatly appeals to employers. In my opinion, the recent layoffs aren’t related to the economy; they’re due to employers adopting AI. Additionally, companies are trying to balance investing in AI with cost-cutting measures. CEOs who’ve previously said, “Our people are everything,” have arguably created today’s job market by obsessively focusing on AI to gain competitive advantages and reduce their largest expense, their payroll.
It wouldn’t be a stretch to assume that most AI usage involves generating written content, content that’s obvious to me, and likely to you as well, to have been written by AI. However, here’s the twist: I don’t particularly care.
Why?
Because the fundamental skill I’m looking for is the ability to organize thoughts and communicate effectively. What I care about is whether the candidate can take AI-generated content and transform it into something uniquely valuable. If they can, they’re demonstrating the skills of being a good thinker and communicator. It’s like being a great DJ; anyone can push play, but it takes skill to read a room and mix music that gets people pumped.
Using AI requires prompting effectively, which requires good writing skills to write clear and precise instructions that guide the AI to produce desired outcomes. Prompting AI effectively requires understanding structure, flow and impact. You need to know how to shape raw information, such as milestones throughout your career when you achieved quantitative results, into a compelling narrative.
So, what’s the best way to gain and enhance your writing skills? As with any skill, you’ve got to work at it.
Two rules guide my writing:
Use strong verbs and nouns instead of relying on adverbs, such as “She dashed to the store.” instead of “She ran quickly to the store.” or “He whispered to the child.” instead of “He spoke softly to the child.”
Avoid using long words when a shorter one will do, such as “use” instead of “utilize” or “ask” instead of “inquire.” As attention spans get shorter, I aim for clarity, simplicity and, most importantly, brevity in my writing.
Don’t just string words together; learn to organize your thoughts, think critically, and communicate clearly. Solid writing skills will significantly set you apart from your competition, giving you an advantage in your job search and career.
Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.
MONTREAL – Politics, public opinion and salary hikes south of the border helped push Air Canada toward a deal that secures major pay gains for pilots, experts say.
Hammered out over the weekend, the would-be agreement includes a cumulative wage hike of nearly 42 per cent over four years — an enormous bump by historical standards — according to one source who was not authorized to speak publicly on the matter. The previous 10-year contract granted increases of just two per cent annually.
The federal government’s stated unwillingness to step in paved the way for a deal, noted John Gradek, after Prime Minister Justin Trudeau made it plain the two sides should hash one out themselves.
“Public opinion basically pressed the federal cabinet, including the prime minister, to keep their hands clear of negotiations and looking at imposing a settlement,” said Gradek, who teaches aviation management at McGill University.
After late-night talks at a hotel near Toronto’s Pearson airport, the country’s biggest airline and the union representing 5,200-plus aviators announced early Sunday morning they had reached a tentative agreement, averting a strike that would have grounded flights and affected some 110,000 passengers daily.
The relative precariousness of the Liberal minority government as well as a push to appear more pro-labour underlay the prime minister’s hands-off approach to the negotiations.
Trudeau said Friday the government would not step in to fix the impasse — unlike during a massive railway work stoppage last month and a strike by WestJet mechanics over the Canada Day long weekend that workers claimed road roughshod over their constitutional right to collective bargaining. Trudeau said the government respects the right to strike and would only intervene if it became apparent no negotiated deal was possible.
“They felt that they really didn’t want to try for a third attempt at intervention and basically said, ‘Let’s let the airline decide how they want to deal with this one,'” said Gradek.
“Air Canada ran out of support as the week wore on, and by the time they got to Friday night, Saturday morning, there was nothing left for them to do but to basically try to get a deal set up and accepted by ALPA (Air Line Pilots Association).”
Trudeau’s government was also unlikely to consider back-to-work legislation after the NDP tore up its agreement to support the Liberal minority in Parliament, Gradek said. Conservative Leader Pierre Poilievre, whose party has traditionally toed a more pro-business line, also said last week that Tories “stand with the pilots” and swore off “pre-empting” the negotiations.
Air Canada CEO Michael Rousseau had asked Ottawa on Thursday to impose binding arbitration pre-emptively — “before any travel disruption starts” — if talks failed. Backed by business leaders, he’d hoped for an effective repeat of the Conservatives’ move to head off a strike in 2012 by legislating Air Canada pilots and ground crew to stick to their posts before any work stoppage could start.
The request may have fallen flat, however. Gradek said he believes there was less anxiety over the fallout from an airline strike than from the countrywide railway shutdown.
He also speculated that public frustration over thousands of cancelled flights would have flowed toward Air Canada rather than Ottawa, prompting the carrier to concede to a deal yielding “unheard of” gains for employees.
“It really was a total collapse of the Air Canada bargaining position,” he said.
Pilots are slated to vote in the coming weeks on the four-year contract.
Last year, pilots at Delta Air Lines, United Airlines and American Airlines secured agreements that included four-year pay boosts ranging from 34 per cent to 40 per cent, ramping up pressure on other carriers to raise wages.
After more than a year of bargaining, Air Canada put forward an offer in August centred around a 30 per cent wage hike over four years.
But the final deal, should union members approve it, grants a 26 per cent increase in the first year alone, retroactive to September 2023, according to the source. Three wage bumps of four per cent would follow in 2024 through 2026.
Passengers may wind up shouldering some of that financial load, one expert noted.
“At the end of the day, it’s all us consumers who are paying,” said Barry Prentice, who heads the University of Manitoba’s transport institute.
Higher fares may be mitigated by the persistence of budget carrier Flair Airlines and the rapid expansion of Porter Airlines — a growing Air Canada rival — as well as waning demand for leisure trips. Corporate travel also remains below pre-COVID-19 levels.
Air Canada said Sunday the tentative contract “recognizes the contributions and professionalism of Air Canada’s pilot group, while providing a framework for the future growth of the airline.”
The union issued a statement saying that, if ratified, the agreement will generate about $1.9 billion of additional value for Air Canada pilots over the course of the deal.
Meanwhile, labour tension with cabin crew looms on the horizon. Air Canada is poised to kick off negotiations with the union representing more than 10,000 flight attendants this year before the contract expires on March 31.
This report by The Canadian Press was first published Sept. 16, 2024.
HALIFAX – Ottawa is negotiating a $500-million bailout for Nova Scotia’s privately owned electric utility, saying the money will be used to prevent a big spike in electricity rates.
Federal Natural Resources Minister Jonathan Wilkinson made the announcement today in Halifax, saying Nova Scotia Power Inc. needs the money to cover higher costs resulting from the delayed delivery of electricity from the Muskrat Falls hydroelectric plant in Labrador.
Wilkinson says that without the money, the subsidiary of Emera Inc. would have had to increase rates by 19 per cent over “the short term.”
Nova Scotia Power CEO Peter Gregg says the deal, once approved by the province’s energy regulator, will keep rate increases limited “to be around the rate of inflation,” as costs are spread over a number of years.
The utility helped pay for construction of an underwater transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not been consistent in delivering electricity over the past five years.
Those delays forced Nova Scotia Power to spend more on generating its own electricity.
This report by The Canadian Press was first published Sept. 16, 2024.
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