China’s trust sector returned to profit growth in the first half of this year, following a regulatory overhaul aimed at curbingshadow banking risks, reports Caixin.

Total profit at China’s trust companies edged up 0.45% year-on-year to RMB 19.7 billion ($2.8 billion) in the period, supported by rising revenue, data from the China Trustee Association showed. Despite the rebound, profit levels remain well below historical highs, reflecting the sector’s ongoing transition.

The profit rebound follows regulatory changes rolled out in 2023 that pushed trust companies away from channel-style lending — particularly to property developers — and toward standardized asset management and service-oriented businesses.

Creditors are holding a vote on whether to give Vanke, which has $50 billion of interest-bearing liabilities, more time to forestall a default, reports Bloomberg. If they vote not to, it would mark a new phase in the country’s real estate woes that have already prompted $130 billion of defaults as well as restructurings and liquidations at other developers, including giants like Country Garden Holdings and China Evergrande Group.

Vanke was  once the country’s biggest developer before it succumbed to an unprecedented property crisis. Holders of Vanke’s RMB 2 billion ($284 million) bond have until 10am to vote on whether they’ll allow the distressed builder to delay principal payments by 12 months or give it until January 28 to further negotiate the terms. The company didn’t pay the note by its December 15 maturity, leaving it in a grace period until the end of Monday.

If the day ends without payment or agreement to extend it, holders could tip the builder, which has roughly $160 billion of assets and more than 125,000 employees, into default.

Italian luxury sneaker maker Golden Goose said that Chinese private equity firm HSG, formerly known as Sequoia Capital China, had become its majority shareholder after buying a stake from current owner Permira, reports Reuters. Singapore’s investment firm Temasek, alongside its subsidiary True Light, has also bought a minority stake in the Venice-based maker of sneakers that retail starting at €500 a pair.

The accord gives Golden Goose a valuation of around €2.5 billion ($3 billion) including debt, a source close to the matter said. The statement did not disclose financial details.

Permira, which acquired Golden Goose in 2020 paying €1.28 billion, will retain a minority stake alongside other existing shareholders including Carlyle, the company said.

China’s overseas bank lending has tripled in four years to RMB 2.52 trillion yuan and sales of onshore and offshore yuan debt are at or near records for the second year running, reports Reuters, as attractive pricing makes yuan poised to overtake overseas dollar loans at Chinese banks.

Bankers say the boom is encouraged by cost, because yuan rates are low. But the market is also starting to generate its own momentum and a deepening pool of demand to own and spend yuan—a sign China’s drive to globalise the currency is making headway even without progress to liberalise capital accounts.

There is a clear disconnect growing in terms of information and perceptions on the state of China’s economy, and its positioning in terms of the tech and AI revolutions. This week’s news provides many examples of this.

The real estate market—the heart of China’s economy—seems to be going from bad to worse, with total sales and construction numbers continuing to fall, as well as the prices of second-hand apartments that actually do trade in the market. The prospect for 2026 looks no better, in spite of commitments from the Central Economic Planning Committee last week to stabilize the real estate market.

Bank lending is weakening, China’s factory output In November fell well below market expectations. And in what certainly looks to be a sign of desperation, there was an announcement that all childbirth fees are going to be dropped—providing free birth for any couples who decide to have a kid.

On the other hand, reported youth unemployment numbers improved somewhat and there were further signs that the System’s huge focus on AI development and semiconductors is beginning, finally, to pay off. Nvidia was granted the right by the Trumpist administration to sell some of their best chips to China, probably removing a significant obstacle to China’s AI development (in what universe does that make sense?). And there was an announcement of a significant breakthrough in terms of semiconductor speeds by universities in China, allegedly up to 100 times as fast as Nvidia chips.

The word on the street this week, from one person we spoke to, was that China is close to nailing the whole AI thing and is poised to announce a major breakthrough sometime next year, thereby positioning it to take over the world. Maybe, maybe not. Someone else told us that China stocks—which have done pretty well over the past year but are still nowhere in terms of their performance over the last two decades compared to the Dow Jones index—are set to see solid rises over the next two or three years. The Center, he said, had decided, and so therefore it will happen. Place your bets, or not, as you prefer.

The anecdotal atmospheric sense of China, as we have reported so many times, remains gloomy with many people apparently increasingly concerned about job losses and inability to pay off mortgages. There are for sure immense strains on the system here at the grassroots level at least.

Anyway, we might as well bask in the glory as much as be glum in the gloom. So, enjoy the sunshine and have a great weekend!