The liquidation order comes more than two years after the company's official inability to pay debt, sparking a crisis for Chinese developers that continues to drag on the world's second-largest economy.

Although Evergrande has struggled to meet its financial obligations over the past two years, it has continued to operate. Now, after the liquidation order was issued, the company is expected to go through a lengthy process to wind down its vast business, which includes projects in hundreds of cities and diverse businesses such as electric car company Evergrande New Energy Auto. However, Hong Kong insolvency proceedings are only recognised to a limited extent in China, and its courts can appoint administrators even in their own jurisdiction.

Evergrande was one of the largest developers in the world, but in 2021 it caught the world's attention with the apparent threat of imminent collapse. In June last year, the firm reported a loss of US$81 billion for the previous two years, and the company also has a debt burden of more than US$330 billion, equivalent to about 2% of China's GDP.

Chinese stock markets have seen significant losses recently, with Chinese and Hong Kong equities down by around US$6 trillion since their February 2021 peak. After Monday's liquidation order, Evergrande shares plunged more than 20% to HK$0.16 before trading was suspended. At the same time, the developer's outstanding dollar bonds were trading at crisis levels, with one maturing in 2025 priced at less than two cents on the dollar.