If Vanke is dying, every Chinese developer should already be dead.

For a very long time, Vanke has been considered the best-managed large developer in China. As a former developer myself, I fully agree with that assessment. Vanke has consistently demonstrated competent management and delivered products that are decent for their price point.

Vanke’s CEO first issued a stark warning about the industry back in 2018, declaring that the company’s primary goal was simply to “stay alive.” At the time, his pessimism shocked the industry. It was an unusual admission from a leader of a firm that had long been a symbol of stability in China’s volatile property sector.

Today, Vanke’s stock is trading at HKD 4.7, a staggering 82% drop in value since that statement. Worse still, its May 2025 bond is trading with a 63% yield to maturity, and its 2027 bond is priced at just 48% of face value. Essentially, the market no longer believes Vanke can remain a solvent, going concern.

In my opinion, every Chinese developer is effectively dead—dead as a viable business model and dead as a solvent company. They are surviving only because the Chinese government prevents creditors from rightfully claiming assets when companies default. While the property market has been in a state of free fall for the past three years, I believe we are still in the early stages of this unraveling. The government continues to attempt to revive the market, and many homeowners still hold onto the hope that conditions will improve.

But developers know better. They fully recognize that their fate is sealed. They are merely playing along with the government’s messaging to extract whatever they can from the current situation.

The most critical issue, however, is the broader economic impact of the real estate collapse. The wealth effect associated with plummeting property values is only beginning to ripple through the economy. The full consequences of this collapse will likely play out over the coming years, with far-reaching effects on economic growth, social stability, and ultimately political stability.