حفلة 2024

China Vanke receives govt. support amid property crisis

China’s government stepped in to bolster China Vanke, a state-backed property firm currently facing financial difficulties, Reuters reported on Monday.

The State Council, China’s cabinet, is coordinating efforts to enhance financial support for the company and has urged banks to consider extending the maturity of private debt.

This intervention comes as China grapples with a debt crisis in its real estate sector, characterised by defaults among major property firms. While the government has previously taken action to support Country Garden, responses to individual firms’ issues have been uncommon.

Vanke, unlike other developers, enjoys government backing, with 33.4 per cent of its ownership held by Shenzhen Metro, a company controlled by Shenzhen’s state asset regulator. The firm is one of the few Chinese property developers still rated as investment-grade by international credit-rating firms.

Following the announcement of government support, Vanke’s stock rose 3.1 per cent on the Shenzhen exchange and 3.4 per cent in Hong Kong. This news also positively impacted the broader market, with the CSI 300 Real Estate Index rising 3.3 per cent and the Hang Seng Mainland Properties Index firming 1.8 per cent.

To alleviate concerns about repayment, Vanke stated that it has deposited funds to repay $630 million due on Monday.

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