China

The list of Chinese developers facing court-ordered liquidation in Hong Kong is getting longer, after a builder of homes in an affluent eastern coastal region was ordered to wind up. Dexin China Holdings Co. received the order Tuesday, three months after a petition was filed by China Construction Bank (Asia), and a year and half after it defaulted, Bloomberg News reported. A new restructuring plan was approved last year, though the developer, which builds residential as well as commercial buildings, wasn’t able to keep up with that either.

China Evergrande New Energy Vehicle Group faces the risk of losing assets such as land and equipment, the company said on Tuesday, as local administrative bodies demand repayment of 1.9 billion yuan ($261.91 million) in subsidies by its units, Reuters reported. The local bodies last month sent a letter of demand asking unit Evergrande Automotive Holdings to terminate a series of investment cooperation agreements made between the parties since April 29, 2019.

China's efforts to clear massive inventory by turning unsold homes into affordable housing are unlikely to help cash-strapped developers due to the programme's limited size and potentially low prices, analysts and developers say, Reuters reported. As part of a support package for the crisis-hit property sector, Beijing announced last month a plan for a 300 billion yuan ($41 billion) lending facility, which could result in 500 billion worth of bank financing for local state-owned enterprises (SOEs) to purchase completed and unsold homes.

As China’s property downturn grinds into a fourth year and house prices continue their downward march, an increasing number of mortgages are slipping underwater, placing fresh financial strain on both households and banks, Bloomberg News reported. Now, with income growth slowing and job losses increasing, people are questioning whether it’s worth the struggle to pay a loan on a property that’s in negative equity. The spectre of negative equity is also concerning banks.

China Vanke said that it will pay a dollar bond due Friday, the state-backed property developer’s final offshore debt obligation for the year, seeking to calm liquidity concerns amid China’s continuing property crisis, the Wall Street Journal reported. The Shenzhen-based company said late Wednesday that it deposited $612.6 million into unit Vanke Real Estate’s bank account to pay the principal and interest on a $600 million 4.2% offshore medium-term note. The note, issued in March 2019, is the property developer’s third offshore bond due this year.

A private gauge of China’s services sector signaled the fastest pace of growth in 10 months in May, echoing official data thanks to strong business activity and market demand, the Wall Street Journal reported. The Caixin services purchasing managers index increased to 54.0 in May from 52.5 in April, Caixin Media Co. and S&P Global said Wednesday. The index, which has now stayed in expansion territory for 17 straight months, reached its highest level since July 2023. A reading above 50 suggests expansion, while one below indicates contraction.

A group of creditors of China South City has filed a lawsuit in Hong Kong against the developer's biggest state-owned shareholder to recover $1.4 billion, according to a court filing and a source familiar with the matter, Reuters reported. The lawsuit is the first such case against a Chinese state shareholder of a developer for recovery of payments owed to creditors under the keepwell provision since the property sector tipped into a debt crisis in 2021.

A private gauge of China’s factory activity expanded at its fastest pace in almost two years in May, in contrast to the official index’s unexpected slide into contraction, the Wall Street Journal reported. The China Caixin manufacturing purchasing managers index rose to 51.7 in May from 51.4 in April, according to data released Monday by Caixin Media Co. and S&P Global. That is a high not seen since June 2022, said Wang Zhe, senior economist at Caixin Insight Group.

New home prices in China rose slightly for a ninth month in May, a private survey showed, driven higher by a slew of supportive steps to prop up the nation's crisis-hit property sector, Reuters reported. The average new home price across 100 cities rose 0.25% on month in May, following a 0.27% gain in April, the data from real estate researcher China Index Academy showed on Saturday. China's property sector, a pillar of the economy, has lurched from one crisis to another since 2021 after a regulatory crackdown on high leverage among developers triggered a liquidity crisis.