China has stepped up efforts to prevent a default by China Vanke, underlining Beijing’s determination to contain financial risks from the property downturn even as it shifts the sector towards a less debt-dependent model. Financial regulators have asked some banks not to classify overdue Vanke loans as non-performing and to extend repayment deadlines, Reuters reported on September 22, citing people familiar with the matter. Some lenders have also been asked to postpone collecting interest. The intervention is among the clearest indications yet that authorities regard Vanke, one of China’s largest developers, as important to broader financial stability.
The scale of Vanke’s exposure explains the concern. The developer had RMB351 billion ($49 billion) of debt at the end of June, with bank loans accounting for roughly 72%, according to Reuters. It lost RMB14.95 billion in the first half after a record RMB88.6 billion loss in 2025. Investors have responded strongly to expectations of policy support: Vanke’s Shenzhen-listed shares have risen almost 25% over the past three trading sessions, closing at RMB3.81 on September 22. Vanke said the move constituted abnormal trading under exchange rules but that there had been no significant undisclosed change in its operations.
The intervention has come as policymakers acknowledge that the industry itself is changing. The Ministry of Housing and Urban-Rural Development said last week that second-hand homes accounted for 52% of housing transactions in the first eight months of 2026, up from 27% in 2020. Officials described China as having entered an era dominated increasingly by existing housing and said new developments should prioritise sales of completed homes rather than the presale model that previously financed much of developers’ construction.
That transition is occurring while new development remains weak. Property investment fell 19.9% year-on-year in January-August and new starts dropped 24.8%, while new-home sales by floor area declined 12.1%. By contrast, second-hand home transactions increased 10.6%.
Beijing is therefore managing two problems simultaneously: keeping large indebted developers such as Vanke from destabilising banks and buyers, while reducing the sector’s dependence on new construction and presales. The immediate risk around Vanke has been contained rather than eliminated, making its refinancing and repayment negotiations an important test of how far authorities are prepared to intervene as China’s housing model changes.