November 28, 2025: China’s financial markets were rattled this week as state-backed developer Vanke faced mounting debt concerns, reviving fears of a prolonged property crisis.
The company’s bonds and shares plunged sharply, sending shockwaves across the real estate sector and raising questions about Beijing’s ability to stabilize the market.
Vanke Bonds Plunge to Distressed Levels
Once considered one of China’s strongest developers, Vanke saw its dollar bond due in 2027 fall below 44 cents, its lowest level since January.
The bond had already dropped a record 12 cents earlier in the week, sparking panic among investors.
Local notes also tumbled, with Shenzhen-listed shares sliding more than 7 percent to RMB 5.47, marking a two-decade low.
Debt Burden and Repayment Challenges
Reports indicate that Vanke must repay nearly $2 billion in debt by June 2026, a daunting task without stronger government support.
The company recently sought to delay repayment on a RMB 2 billion ($280 million) onshore bond, a move that accelerated the selloff.
Analysts warn that such restructuring efforts could deepen liquidity concerns and trigger wider instability in the sector.
Investor Confidence Shaken
Investor sentiment has deteriorated rapidly. According to Moneycontrol, “Vanke’s plunge in credit markets highlights the broader challenges facing Chinese policymakers.”
The report emphasized that without clear signs of state intervention, fears of default will continue to weigh on the market.
S&P Global added to the pressure by issuing a fresh downgrade, cutting Vanke’s bonds to CCC- from CCC.
The agency maintained a negative outlook, signaling that the company’s financial struggles are unlikely to ease soon.
“The downgrade triggered a selloff across Vanke’s onshore and offshore bonds,” S&P noted, underscoring the severity of the crisis.
Broader Impact on China’s Property Sector
China’s property market has already been weakened by the defaults of giants like Evergrande and Country Garden.
Vanke’s troubles, however, carry greater weight due to its state-backed status and extensive projects across major cities. The renewed crisis threatens to derail Beijing’s efforts to restore confidence and stabilize housing demand.
With industrial output and consumer spending also slipping, the property sector’s instability adds another layer of risk to China’s economic recovery.
As one analyst observed, “If Vanke cannot reassure investors, the ripple effects could be felt across the entire financial system.”
For now, all eyes remain on Beijing’s next move. Whether through direct bailouts or policy easing, the government’s response will determine if Vanke’s crisis becomes another chapter in China’s long-running real estate turmoil.
