China Asks Banks To Support Tottering Property Firm Vanke

China has asked banks to enhance financing support for state-backed China Vanke and called on creditors to extend private debt maturity in a rare intervention from the central government to help an embattled property firm, as reported by Clare Jim for Reuters.

The State Council - China's cabinet - is coordinating support efforts for China Vanke. I Photo: 刘梦 Wikimedia Commons

The State Council - China's cabinet - is coordinating support efforts for China Vanke, said sources with direct knowledge of the matter, adding that financial institutions have been requested to make swift progress.

Authorities are scrambling to stabilize a real estate sector in the throes of a debt crisis characterized by default among the country's biggest property firms, with support including boosting financing for developers of certain projects.

However, the central government's response to individual firms' woes has been rare, with action taken for Country Garden but most others tackled at a local level or left to their fate, including one-time market leader China Evergrande, which faces liquidation.

Unlike those two developers, Vanke has government backing, with 33.4% owned by Shenzhen Metro, a company held by Shenzhen's state asset regulator.

It is also one of the few remaining Chinese property developers whose credit is rated as investment-grade by international credit-rating firms, so any debt repayment trouble could decimate market confidence, analysts said.

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