China

China Vanke Co., the nation’s biggest developer, is focused on developing homes for owner occupiers rather than investors because the country’s property industry has passed its “golden era,” said President Yu Liang, Bloomberg News reported. “The period in which everybody makes money out of property is gone,” Yu told reporters May 26 in Dongguan, a southern city in Guangdong province.

STX Dalian Group is now formally under court receivership after China’s Dalian court accepted the company’s application, Seatrade reported. The financially-troubled group will now undergo a restructuring process, and the court and its creditors will proceed to discuss how to resolve the debts of the company. Since May 2013, the operations of STX Dalian have been virtually crippled and the yards are being emptied out due to massive cash flow problems.

LDK Solar Co., the Chinese solar manufacturer which defaulted on a bond that matured in February, said it received 2 billion yuan ($321 million) of loans from Chinese banks, Bloomberg News reported. China Development Bank Corp., the nation’s biggest policy lender, is leading the funding from 11 financial institutions, LDK spokesman Peng Shaomin said in a phone interview today. LDK will spend more than 400 million yuan on a polysilicon project and use the remainder to boost its cash reserves, Peng said.

China will increasingly manage its troubled property sector locally, as the nation seeks to avoid causing either an abrupt slowdown that undermines the economy or another surge in prices, according to government economists involved in policy discussions, the International New York Times reported. After increasing at double-digit rates through most of last year, home prices started easing in late 2013 as a sustained campaign to clamp down on speculative investment and easy credit gained traction.

China will allow local governments to sell bonds for the first time in two decades in a big step towards tackling a looming crisis in public finances and reining in the shadow banking sector that municipal authorities rely on for funding, the Financial Times reported. China’s finance ministry said 10 local governments in mostly wealthy and well-managed provinces and cities including Beijing, Shanghai and Guangdong, would be included in a pilot scheme to sell bonds on their own.

China’s economy is sputtering as evidence mounts that a nationwide property bubble is on the point of bursting, the Financial Times reported. Virtually every indicator for economic growth in China turned down in April as the all-important real estate market saw sales fall 7.8 per cent in renminbi terms in the first four months from the same period a year earlier. Investment in real estate is the single most important driver of the Chinese economy and a crucial factor in global commodity demand and pricing.

China’s broadest measure of new credit fell last month as authorities extended their campaign to tame financial dangers even as construction and manufacturing data point to risks that the economy’s slowdown will worsen, Bloomberg News reported. Aggregate financing was 1.55 trillion yuan ($249 billion) in April, the People’s Bank of China said yesterday in Beijing, compared with 2.07 trillion yuan in March. New local-currency bank loans were 774.7 billion yuan, down from 1.05 trillion yuan the previous month.

Chinese President Xi Jinping said the nation needs to adapt to a “new normal” in the pace of economic growth and remain “cool-minded” amid a slowdown that analysts forecast will lead to the weakest expansion since 1990. China’s growth fundamentals haven’t changed and the country is still in a “significant period of strategic opportunity,” Xi said, according to a Xinhua News Agency report on the central government website on May 10. At the same time, the government must prevent risks and take “timely countermeasures to reduce potential negative effects,” he said.

China's central bank said it would strengthen monitoring of default risk from loans to the property sector, local-government financing companies and industries struggling with overcapacity, The Wall Street Journal reported. In its first-quarter monetary report, the People's Bank of China said Tuesday that it would aim to prevent these risks from spreading more widely through the financial sector. Several smaller property developers have defaulted on loans in recent months amid slower growth in the housing market and the economy overall.

Workers at Yue Yuen Industrial, which makes running shoes for Nike and Adidas at a big factory complex in Gaobu, said it underpaid their pensions for years, the Financial Times reported. After 11 days of protest, the Dongguan municipal government handed them a rare victory by saying the company should have based contributions on a higher pay level. Yue Yuen estimates that it will have to pay an additional $31m just this year after agreeing to base pension payments on workers’ total pay, including overtime.