China Evergrande Group
Despite large census size, effective size for critical dependencies was small, and when random shocks hit all dependencies simultaneously, drift overpowered strategic adaptation.
Once China's largest property developer by sales with peak assets of 2.3 trillion RMB ($358 billion), Evergrande collapsed into default in late 2021 with approximately $283 billion in liabilities - the largest default in Chinese corporate history.
The company's trajectory exhibits classic features of drift-dominated evolution: random fluctuations in external conditions caused wild swings in debt load, eventually hitting an absorbing boundary (bankruptcy). Despite large census size, effective size for critical dependencies was small, and when random shocks hit all dependencies simultaneously, drift overpowered strategic adaptation.
Cautionary Notes on China Evergrande Group
- Operated in volatile environment with small effective population size for critical dependencies
- Random walk to absorbing boundary despite large census size