China’s property debt crisis is showing new signs of trouble after entering its fourth year, with one of the country’s major state-backed developers under scrutiny by investors.
Some of China’s largest insurers are sounding an alarm over the debt risks of China Vanke Co (萬科), according to people familiar with the matter, as shares and bonds of the major developer hit record lows on repayment concerns.
At least two Beijing-based insurers that farm out annuity investments late last week told their external portfolio managers to closely monitor Vanke’s credit risks, the people said.
Photo: Bloomberg
One life insurer also told its pension managers to curb exposure, they said.
Vanke, China’s second-biggest developer by sales, has begun a new round of negotiations with several state insurers in the past few days to extend maturities of some private borrowings, the people said.
No deal has been reached.
In response to queries from Bloomberg, Vanke yesterday said that it has prepared funds to repay its 5.35 percent dollar bond due on Monday next week and that the payment is being arranged orderly.
The warnings about Vanke’s risks are particularly worrisome and threaten to elevate the sector’s debt woes to the next level because the company is seen as a bellwether for Beijing’s support for major developers with strong ties to the state.
The company is also one of China’s few remaining and surviving investment-grade builders, following a record wave of defaults that engulfed mostly private-sector builders, including former industry giants Country Garden Holdings Co (碧桂園) and China Evergrande Group (恆大集團).
The growing concerns about Vanke also come at an inconvenient time for authorities as the nation began its seven-day annual parliamentary sessions yesterday, with key policy topics from the housing crisis to local-government debt in focus.
Authorities pledged to refine real-estate policies to provide stronger support for the ailing sector, including treating developers equally regardless of their ownership.
“It is no surprise that Vanke is in trouble today,” Beijing Shengao Fund Management Co (深高基金管理) chief investment officer Li Kai (李凱) said. “Domestic real-estate sales have been so poor that it is difficult for companies to hang on, and the market has not seen strong visible support from local governments.”
Vanke had about 1.7 trillion yuan (US$236 billion) of assets and 1.3 trillion yuan of total liabilities as of the middle of last year, its interim report showed.
The builder on Friday last week said that it planned to raise about 1.16 billion yuan in an infrastructure REIT that would list in Shenzhen.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US