HONG KONG • Evergrande Group chairman Hui Ka Yan was China's richest man, a symbol of the country's economic rise who helped transform poverty-stricken villages into urbanised metropolises for the fledgling middle class.

As his company became one of the country's largest property developers, he amassed the trappings of the elite, with trips to Paris to taste rare French wines, a million-dollar yacht, private jets and access to some of the most powerful people in Beijing.

He once owned the A$39 million (S$38.4 million) Villa del Mare in an exclusive suburb in Sydney.

"All I have and all that Evergrande Group has achieved were endowed by the party, the state and the whole society," he said in a 2018 speech thanking the Communist Party of China for his success.

China is threatening to take it all away. The debt that powered the country's breakneck growth for decades is now jeopardising the economy - and the government is changing the rules.

Beijing has signalled that it will no longer tolerate the strategy of borrowing to fuel business expansion that turned Mr Hui and his company into a real estate powerhouse, pushing Evergrande to the precipice.

Last week, the company, which has unpaid bills totalling more than US$300 billion (S$407 billion), missed a key payment to foreign investors. That sent the world into a panic over whether China was facing its own so-called Lehman moment, a reference to the 2008 collapse of the Lehman Brothers investment bank that led to the global financial crisis.

Evergrande's struggles have exposed the flaws of the Chinese financial system - unrestrained borrowing, expansion and corruption. The company's crisis is testing the resolve of Chinese leaders' efforts to reform as they chart a new course for the country's economy.

If they save Evergrande, they risk sending a message that some companies are still too big to fail. If they don't, as many as 1.6 million home buyers waiting for unfinished apartments and hundreds of small businesses, creditors and banks may lose their money.

"This is the beginning of the end of China's growth model as we know it," said Mr Leland Miller, chief executive of consulting firm China Beige Book. "The term 'paradigm shift' is always overused so people tend to ignore it. But that's a good way of describing what's happening right now."

Mr Hui was raised by his grandparents in Henan province, a rural corner of central China. His mother died from a treatable illness when he was a baby; his family was too poor to afford her medical care. As a young boy, he lived under a thatched roof that could not keep out the wind or rain. He ate sweet potato flour and studied on a desk made of clay.

"Back then, I was anxious to be helped by others, and was eager to land a job, leave the countryside forever and eat wheat flour," Mr Hui said in his 2018 speech.

He went to college and then spent a decade working at a steel mill. He started Evergrande in 1996 in Shenzhen, a special economic zone where Deng Xiaoping launched the country's experiment with capitalism. As China urbanised, Evergrande expanded.

Evergrande lured new home buyers by selling them on more than just the tiny apartment they would get in a huge complex with dozens of identical towers. New Evergrande customers were buying into the lifestyle associated with names like Cloud Lake Royal Garden and Riverside Mansion.

Mr Hui grew Evergrande from a small outfit with fewer than a dozen employees into China's most prolific developer through a combination of rampant borrowing and elite political connections.

The company often invested heavily in projects in provincial capitals, where officials with ambitions to become Politburo members were measured by their ability to create economic growth.

Early on, Mr Hui cultivated relationships with the family members of some of China's most senior officials. In 2002, listed among the company directors in Evergrande's annual report was Mr Wen Jiahong, the brother of then Vice-Premier Wen Jiabao, who oversaw the country's banks as head of the Central Financial Work Commission.

Mr Wen Jiabao became China's premier the next year. Not only was his brother an Evergrande director, but he also once controlled the second-biggest stake in the fast-growing company, according to corporate documents reviewed by The New York Times.

In 2008, Mr Hui joined an elite group of political advisers known as the Chinese People's Political Consultative Conference.

"He could not have gotten so big without the collaboration of the country's biggest banks," Associate Professor Victor Shih, a political scientist at the University of California, San Diego, said of Mr Hui.

To supercharge Evergrande's growth, Mr Hui often borrowed twice on each piece of land that he developed - first from the bank and then from home buyers, who were sometimes willing to pay 100 per cent of the value of their future home before it was built.

As Evergrande and its competitors expanded, property grew to account for as much as one-third of China's economic growth. Evergrande built more than 1,000 developments in hundreds of cities and created more than 3.3 million jobs a year.

With access to cheap money and unbridled ambition, Mr Hui expanded into areas in which Evergrande had no experience or expertise, including bottled water, electric cars, pig farming and professional sports.

He bought two private jets and used them to fly his football team, now called the Guangzhou Football Club, to games. His electric vehicle company had a bold vision to become bigger and more powerful than Tesla; so far it has delayed mass production.

When China's economy began to cool down, the damage caused by Evergrande's voracious appetite for debt became impossible to ignore. There are nearly 800 unfinished Evergrande projects in more than 200 cities. Employees, contractors and home buyers have held protests to demand their money. Many fear they will become unwitting victims in China's debt-reform campaign.

Mr Yong Jushang, a contractor from Changsha in central China, still has not been paid for the US$460,000 of materials and work he provided for a project that was completed in May.

Desperate not to lose his workers and business partners, he threatened to block the roads around the development last month until the money was paid. "It's not a small amount for us," he said. "This could bankrupt us."

Mr Yong and others like him are at the heart of regulators' biggest challenge in dealing with Evergrande. If Beijing tries to make an example out of Evergrande by letting it collapse, the wealth of millions of people could vanish along with Mr Hui's empire.

In August, Evergrande executives were summoned by regulators, who warned them to keep the company's debt under control. Amid concerns that an Evergrande demise could spread through the economy, Beijing unleashed a flood of capital into China's banking system last week.

Mr Hui has remained mostly out of the spotlight.

His company has tried to sell off some of its assets to raise new funds, but has had little success. Home buyers have recently protested on the streets and complained online about delays in construction. The central bank has put Evergrande on notice.

China's increasingly nationalistic commentators are calling for the company's demise. Debt-saddled corporate giants like Evergrande were given the freedom to "open their bloody mouths and devour the wealth of our country and our people until they are too big to fall", Mr Li Guangman, a retired newspaper editor whose recent views have been given a platform by official state media, wrote in an essay.

Without proper intervention, he argued, "China's economy and society will be set on the crater of the volcano where all may be ignited any time".

NYTIMES