After the release of China’s first-quarter GDP growth, International Monetary Fund says the lack of a ‘comprehensive response’ could lead to less economic growth than Beijing is hoping for this year.

Chinese developers suffered another dismal month in March as new home sales tumbled 46 per cent from a year earlier. It would be premature to expect a turnaround amid an ongoing liquidity crisis.

The embattled property developer posted a 46.4 per cent slump in net profit for 2023, alarming investors just weeks after markets were roiled by rumours of liquidity problems at the firm.

Pan Gongsheng, governor of the People’s Bank of China, has attempted to dispel concerns over the country’s laggard property market in closed-door talks with executives and financiers.

A loan for China Vanke, one of China’s largest developers, could provide temporary relief to a sector rocked by defaults and by a court order for the liquidation of China Evergrande Group, the world’s most indebted developer.

The impact of Monday’s downgrade is ‘controllable’, the second-largest Chinese developer says. Its shares rose more than 10 per cent to HK$6.30 on Tuesday on belief commercial banks will raise up to US$11.1 billion to repay its debts.

The international ratings agency has stripped state-backed property giant China Vanke of its investment-grade credit rating amid concerns over its liquidity and ability to access funding amid declining sales.

The State Council is coordinating efforts related to supporting China Vanke, according to sources. Any debt repayment troubles at Vanke could further dampen market confidence, analysts say.

The country’s second-largest developer has assured investors it has the funds in place to repay its outstanding offshore debts coming due soon, as its shares and bonds tumbled amid rumours about liquidity distress.

Some of China’s largest insurers are sounding the alarm over the debt risks of China Vanke, according to people familiar with the matter, as shares and bonds of the firm hit record lows on repayment concerns.

Property sales in mainland China posted another month of declines in February with demand remaining weak due to uncertainties in income expectations and volatility in the market

Link Reit, which bought a 50 per cent interest in Qibao Vanke Plaza in April 2021, plans to acquire the remaining 50 per cent stake from the indebted Chinese developer.

State-owned companies will dominate as the age of ‘fast leverage and fast growth’ is over, and developers face brutal years ahead, analysts said.

A downward trend in home sales accelerated in December as discounts and easing measures failed to spark demand.

Vanke is selling its stake in the hotel management joint ventures including Banyan Tree Services (China) and Banyan Tree Hotel Management (China) as it seeks to weather the country’s property downturn.

The first batch of Chinese developers to benefit from the new funding avenue of Reits through the spin-off of their shopping centre assets, has received approvals from Chinese regulators.

Banks have been given some wriggle room to choose who they lend their money to and are likely to prefer larger, state-owned developers, rather than their cash-strapped, privately owned peers, analysts said.

China Vanke, China’s second largest property developer by sales, said it will make timely repayments of its debts after a Chinese authority, which is also its largest shareholder, vowed support to “revitalise the bulk assets and promote the liquidity” of the company.

The spin-off of shopping centres that are run by Chinese developers will offer an alternative source for these builders to raise money from capital markets and manage their leverage, the ratings agency said.

In the second of a two-part series on the crisis surrounding Country Garden, we look at how a company considered one of China’s most stable developers is now struggling to navigate a slumping property market, a sluggish economy and changing demographics in the smaller cities that have fuelled its growth.

The slowdown in China’s property market continued in July, with major developers reporting a slump in contracted sales, further exacerbating their liquidity crisis.

Three major Chinese developer including Vanke have moved a step closer to raising funds in the country’s capital market after Beijing restarted equity financing for the property sector late last year.

The authorities are likely to keep rolling out incentives to support mainland China’s property sector as April’s home sales look set to tank, according to analysts.

The four-day land sale, which ended on Friday, saw more than 50 property developers engaged in intense bidding that resulted in 15 plots selling higher than their floor price.

Investors who have missed out on the ChatGPT trade can look to property stocks for their low valuations and improving fundamentals, Soochow Securities’ Chen Li says.

The indebted Chinese developer said it plans to raise up to 15 billion yuan by issuing 1.1 billion shares to specific investors in the Shenzhen stock market to replenish its liquidity and fund real estate projects that are already under way.

The 100 largest property developers in China ended 2022 with 7.6 trillion yuan (US$1.1 trillion) in sales, down 41.3 per cent from a year before, according to a report by the China Index Academy (CIA).

The CSRC’s measures to facilitate equity financing for Chinese developers applies to companies listed in mainland China and in Hong Kong.

After the PBOC and the CBIRC officially confirmed a 16-point rescue plan for the real estate sector on Wednesday, banks have been rushing to offer financing support for several struggling companies.