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Vanke bondholders reject payment extension

China to boost exports, imports in 2026: Official BEIJING: China plans to expand exports and imports next year as part of efforts to promote “sustainable” trade, a senior economic official said on Saturday, state broadcaster CCTV reported. The trillion-dollar trade surplus posted by the world’s second-largest economy is stirring tensions with Beijing’s trade partners and drawing criticism from the International Monetary Fund and other observers who say its production-focused economic growth model is unsustainable. “We must adhere to opening up, promote win-win cooperation across multiple sectors, expand exports while also increasing imports to drive sustainable development of foreign trade”“ Han Wenxiu, deputy director of the Central Financial and Economic Affairs Commission, told an economic conference. China will encourage service exports in 2026, Han said, pledging measures to boost household incomes, raise basic pensions and remove “unreasonable” restrictions in the consumption sector. He restated the government’s call to rein in deflationary price wars, dubbed “involution”, where firms engage in excessive, low-return rivalry that erodes profits. The IMF this week urged Beijing to make the “brave choice” to curb exports and boost consumer demand. “China is simply too big to generate much (more) growth from exports, and continuing to depend on export-led growth risks furthering global trade tensions,” IMF managing director Kristalina Georgieva told a press conference last week. Economists warn that the entrenched imbalance between production and consumption in the Chinese economy threatens its long-term growth for the sake of maintaining a high short-term pace. Chinese leaders promised last week to keep a“proactive”fiscal policy next year to spur both consumption and investment, with analysts expecting Beijing to target growth of around 5%. – Reuters

o Setback increases default risk and revives Chinese property crisis concerns BEIJING: China Vanke failed to secure bondholder approval to extend by one year a bond payment due today, a filing showed, increasing the risk of default for the developer and renewing concerns about the crisis-hit property sector. The setback for state-backed Vanke, one of China’s highest-profile developers with projects in major cities, renews concerns about the property sector, where some of the country’s best-known developers have defaulted in recent years. The rejection in a three-day vote that ended late on Friday gives the developer a grace period of five business days to pay 2 billion yuan (RM1.1 billion) on the onshore bond, the filing to the National Association of Financial Market Institutional Investors showed. Vanke may propose extending the grace period to 30 business days, said Yao Yu, founder of credit research firm RatingDog. “If bondholders approve, it would give the developer more time to communicate with investors and reach a consensus.” Vanke did not respond to Reuters request for comment outside business hours on the rejection by bondholders. Among the companies hardest hit by China’s property crisis that started in 2021 was former giant China Evergrande, which was ordered to liquidate by a Hong Kong court and was delisted this year after tighter regulations sparked a liquidity crunch. Since then, the sector, which once made up a quarter of China’s gross domestic product, has been hit by slowing demand, with homebuyer sentiment hurt by developers’ defaults, weighing on the growth of the world’s second-largest economy. China’s home prices are set to decline 3.7% this year and keep falling next year before stabilising in 2027, a quarterly Reuters survey found this month. Approval of Vanke’s delay proposal would have required support from at least 90% of voting bondholders.

A person walks past by a gate with a sign of Vanke at a construction site in Shanghai. – REUTERSPIC

the property market with city-specific measures. Vanke’s onshore notes were trading deep in distressed levels at around 20–30 yuan per 100 face value, while its two offshore dollar bonds are hovering near 20 cents on the dollar. Ratings agency S&P Global downgraded Vanke on Nov 28, saying its financial commitments are unsustainable due to its weak liquidity levels, and that it was “vulnerable to risks of nonpayment or distressed restructuring”. Vanke is about 30% owned by state-owned Shenzhen Metro Group. That state backing had been considered by some analysts enough to stop the company from sliding into severe financial trouble. Reuters reported last month that state-owned China International Capital Corporation had been brought in to assess Vanke’s debt and that a debt restructuring was one option. A debt restructuring by Vanke, with 364.3 billion yuan of interest-bearing liabilities, could potentially dwarf defaults this decade by privately owned peers Evergrande and Country Garden. – Reuters

The proposal to postpone principal and interest payments by a year without extra credit support was rejected with 76.7% opposing it, the filing showed. Bloomberg News first reported the development on Saturday. Two other proposals for the same bond, which included credit enhancement measures, drew some backing, with one winning 83.4% approval, but neither met the 90% threshold, according to the filing. The developer is also seeking to extend by one year the repayment of a yuan bond worth 3.7 billion yuan due on Dec 28, with a bondholder meeting scheduled for Dec 22. The latest debt woes at a large Chinese developer are set to weigh on the market sentiment and renew investor calls for stimulus measures to revive the sector, whose health is crucial for Beijing to bolster China’s economic growth. Chinese leaders promised on Thursday to maintain a “proactive” fiscal policy next year that would stimulate both consumption and investment, and reiterated a goal to stabilise However, uncertainties remain, as the Chinese government has yet to greenlight any purchase of the H200. Chinese officials convened emergency meetings on Wednesday to discuss the matter and will decide whether to allow it to be shipped into China, said one of the two sources and a third source. Very limited quantities of H200 chips are currently in production, Reuters reported on Wednesday, as the US AI chip leader is focused on producing its most advanced Blackwell and upcoming Rubin lines. Supply of H200 chips has been a major concern for Chinese clients and they have reached out to Nvidia seeking clarity on this, sources said. As part of the briefing provided by Nvidia, the company has also given them guidance on

Nvidia considers increasing H200 chip output due to robust demand BEIJING: Nvidia has told Chinese clients it is evaluating adding production capacity for its powerful H200 AI chips after orders exceeded its current output level, according to two sources briefed on the matter. and ByteDance have already reached out to Nvidia about purchasing the H200 and are keen to place large orders, Reuters reported on Wednesday. current supply levels, said one of the first two people, without providing a specific number. The H200 went into mass deployment last year and is the fastest AI chip in Nvidia’s previous Hopper generation. have been concerns that allowing the H200 into China could stymie the industry.

“Its (H200) compute performance is approximately 2-3 times that of the most advanced domestically produced accelerators”“ said Nori Chiou, investment director at White Oak Capital Partners. “I’m already observing many CSPs (Cloud Service Providers) and enterprise customers aggressively placing large orders and lobbying the government to relax restrictions on a conditional basis,” he said, adding Chinese AI demand exceeds the capacity of local production. During the emergency meetings, there was a proposal to require each H200 purchase to be bundled with a certain ratio of domestic chips, one of the first two sources and a third source said. For Nvidia, adding new capacity is also challenging at a time when it is not only transitioning to Rubin but also competing with companies including Alphabet’s Google for limited advanced chipmaking capacity from TSMC. – Reuters

The chip is manufactured by TSMC using the Taiwanese firm’s 4nm manufacturing process technology. TSMC and China’s Ministry of Industry and Information Technology (MIIT) did not immediately reply to requests for comment. Chinese companies’ strong demand for the H200 stems from the fact that it is easily the most powerful chip they can currently access. It is about six times more powerful than the H20, a downgraded chip from Nvidia tailored for the Chinese market that was released in late 2023. Trump’s decision on the H200 comes at a time when China is pushing to promote its own domestic AI chip industry. As domestic chip companies have yet to produce products that match the H200, there

The move comes after President Donald Trump said last Tuesday the US government would allow Nvidia to export H200 processors, its second-fastest AI chips, to China and collect a 25% fee on such sales. Demand for the chip from Chinese companies is so strong that Nvidia is leaning toward adding new capacity, one of the sources said. They declined to be named as the discussions are private. “We are managing our supply chain to ensure that licensed sales of the H200 to authorised customers in China will have no impact on our ability to supply customers in the United States,” an Nvidia spokesperson said in a statement to Reuters after the story was published. Major Chinese companies including Alibaba