Evergrande — once one of China's biggest property developers — is having its shares delisted from Hong Kong's stock exchange.

The company's spectacular rise mirrored China's ascent on the global stage. Its ruinous downfall over the last few years threatened to weigh down the world's second-largest economy.

For more, Marketplace's China correspondent, Jennifer Pak, joined “Marketplace Morning Report” host Nova Safo. The following is an edited transcript of their conversation.

Nova Safo: So Evergrande has more than $300 billion in debt. It hasn't been able to pay that debt; it's been ordered to liquidate. Take us back to the beginning. How did we get here? How did Evergrande get as big as it did in the first place?

Jennifer Pak: Good timing. Evergrande started in 1996 when there was explosive demand for housing. But more importantly, Evergrande got a lot of cheap credit to expand, and that was the same for a lot of property firms. Evergrande was just a lot more brazen.

Safo: A lot more brazen, and it did rack up all that debt I mentioned, which made Evergrande successful, I suppose, but it was also responsible for its downfall?

Pak: That's right. It just had too much debt, which is fine when home prices kept going up and cheap credit kept rolling in. But that all stopped in 2021. Beijing put a cap on borrowing, plus housing sales had slowed down. Evergrande just didn't have as much money to repay debt.

Safo: Now is there no way out for Evergrande at this point? Is there any way for them to restructure the debt they've accumulated?

Pak: Not really, because their core business property isn't really doing well. So in the past, if Evergrande was selling 500 billion yuan a year — that's roughly $70 billion in today's money. Now, they would be very lucky if they could even sell a tenth of that, according to a real estate researcher Yan Yuejin from E-House. Also, Evergrande spent lavishly. It bought a soccer team, an electric vehicle company, and also planned Fairyland theme parks to rival Disneyland. And China's government really doesn't want to keep encouraging this, so they're not interested in bailing them out either.

Safo: And Evergrande's delisting from the Hong Kong stock exchange, that's not exactly a surprise, is it?

Pak: No. Evergrande shares in Hong Kong had been suspended since last year, so delisting just makes it official that shareholders are holding worthless stocks.

Safo: And what about people who bought homes that Evergrande was supposed to construct but didn't? How is the country's property sector as a whole faring?

Pak: Well, Chinese officials have tried to contain that part with homebuyers. They have tasked local governments across China to finish millions of units. We did interview someone who received such a unit, and they said the work was a bit shoddy, but at least the condo was finished. Overall though, the property sector is pretty weak. Since 2021 at its peak until now, housing prices have dropped by 35%.

Safo: That seems like a really hard thing to recover from. What are the lessons for investors? What are they learning from the Evergrande episode?

Pak: Well, first, experts say, if an investment sounds too good to be true — like Evergrande was offering double-digit interest rates — investors should question that. Also, using massive debt to fuel expansion is not a viable business model long-term.