The focus today will be on China’s macro data, together with development in China’s property market on whether we will see a default from Vanke. China’s Vanke, once China’s biggest property developer by sales, failed to obtain sufficient support for its plan to delay paying a US$283million note due 15 December. The original proposal along with two others on the ballot would have allowed for a one-year extension. Vanke must now find money to pay the bond by the end of Monday or within a grace period of five business days, or creditors could call default. While Vanke had long benefited from a perception that authorities would help support it given the largest shareholder is state-owned Shenzhen Metro group, this support has come under scrutiny in recent months after Shenzhen Metro signalled plans to tighten borrowing terms, resulting in a sharp fall in Vanke’s bonds.
Overall, Chinese assets and markets have so far in 2025 taken the property downturn in their stride despite continuing bad news, in a housing slump that has reached its fifth year and where it is still unclear when exactly it could bottom out. The good news is that China’s property market is now a far smaller share of the economy and perhaps the systemic spillovers more contained, but with many household assets still tied to property the impact through the wealth effect and sentiment continues to be important, even as the delta to growth is smaller relative to the past.
In that context, China will release its monthly macro data for November, while is expected to show weakness in domestic demand including retail sales and fixed asset investment, while industrial production could hold up better given still decent export momentum.
Read More: Asia FX Talk – Focus on China’s macro and real estate
