If luxe could kill…
The billionaire chairman of China’s troubled Evergrande real estate empire is having to tighten his belt…
While strolling through Old Bond Street in October 2021 en route to give a talk at Christie’s, I reflected once again on the remarkable transition that part of Mayfair has undergone since the 1980s. Back then, the area was still a crucible of the serious art trade. I remember being invited to the snug, upstairs gallery of the scholarly Old Master dealer Clovis Whitfield, who served me gunpowder tea while generously sharing his expertise on Caravaggio for a story I was writing for Antiques Trade Gazette, at that time the leading weekly art market publication.
How times have changed. As I walked past Clovis’s old address recently I couldn’t help rubber-necking the cream Bentley Mulsanne parked outside what is now a glitzy outpost of the Hermès luxury goods chain.
Needless to say, I reached for the trusty iPhone camera. After all, it’s hard to imagine a more eloquent symbol of the confluence of opportunistic property development and the growth of the upmarket rag trade in this corner of Mayfair over the past forty years. As a result, many art dealers moved away, unable to compete with the rocketing rents demanded by real estate developers seeking to capitalise on the hordes of Russian, Asian and Middle Eastern UHNWIs pouring into London, the vast majority of whom crave Hermès over Holbein, Chanel over Chagall. Think Veblen.
Like many £300,000 Bentley motors, this particular urban galleon boasted a personalised number plate — VIP XU. By the time I reached Christie’s, I’d established that the Very Important owner must be none other than Chinese billionaire Hui Ka Yan (aka Xu Jiayin), Communist Party Chairman of the now beleaguered Evergrande real estate empire. Xu is known affectionately in China as “Belt Brother” on account of his predilection for Hermès belts, which explains why his slumbering chauffeur was parked outside their Old Bond Street store.
It’s tempting to draw a simplistic connection between the head-spinning, debt-driven boom in Chinese real estate development over the past thirty years and the concomitant explosion of the country’s art and luxury goods markets. (The rapid acceleration of China’s art market since the early 1990s has just been analysed by Kejia Wu in her engaging new book, A Modern History of China's Art Market, which I will be reviewing in a future post.)
The Evergrande property conglomerate is currently labouring under liabilities of $340 billion and is reported to be under investigation by the China Securities Regulatory Commission. China’s property sector contributes as much as 30% of the country’s GDP, so numerous real estate developments and other commercial sectors in many countries will be affected by Evergrande’s meltdown.
Xu Jiayin, Evergrande’s chairman, has seen his personal wealth shrink from almost $36 billion to an estimated $3.2 billion, according to Forbes. He was recently placed under house arrest, joining any number of other Chinese former billionaire tycoons feeling the heel of Xi Jinping’s uncompromising single-party rule. Xu is being accused of money-laundering and other “illegal crimes”.
Now under home detention, one assumes Xu is languishing in his sprawling mansion in The Peak — Hong Kong’s elite residential enclave — polishing his Hermès belts and his personalised Bentley.
It gives a whole new meaning to ‘Belt and Road’.