HONG KONG, Jan 17 — Concern over China’s embattled property sector has deepened after state media reported the detention of China Vanke’s chief executive and said authorities are overseeing operations, sending the developer’s shares plummeting today.
CEO Zhu Jiusheng was detained on Wednesday, The Economic Observer reported yesterday without detailing reasons. It also said the developer could be subject to government takeover and reorganisation, citing unidentified sources.
Vanke declined to comment when contacted by Reuters. The ministry of public security did not respond to a faxed request for comment. Calls to the Shenzhen government went unanswered.
The developer would find itself in a “make or break” moment should the news be true, JPMorgan analysts said in a client note, depending on whether the government decides to bail it out or let it default on debt.
“The CEO being ‘taken away’ or the stepping-in of a working group may sound negative at first glance, but we believe it is important to note if the government’s ultimate determination is to support Vanke to meet debt obligations.”
It is not uncommon for authorities to detain former executives. High-profile figures include Evergrande Group Chairman Hui Ka Yan, who has not been seen in public since 2023, two years after the world’s most indebted developer defaulted on most of its US$300 billion (RM1.35 trillion) in liabilities.
Some executives have been detained, with little or no public information about their fate.
The development has unnerved investors just as authorities work to pull the property sector out of a debt crisis that has dragged since 2021 with measures such as cutting mortgage rates and minimum down-payment ratios.
Vanke’s Hong Kong-listed shares fell as much as 9 per cent today to their lowest since September, while its Shenzhen-listed stock fell more than 4 per cent.
The developer’s May 2025 US dollar notes were bid at 56.491 cents on the dollar versus 63 cents a day earlier.
Two of Vanke’s yuan bonds slid more than 20 per cent, triggering a trading suspension at the Shenzhen bourse.
Social media post
Vanke, a bellwether of China’s property market, has faced a deepening bond sell-off over the past week as worries grow about its mountain of debt coming due, against the backdrop of a sector crisis that has left homes unfinished and firms bankrupt.
Its financial woe became public early last year after the developer sought to extend the maturity of debt as monthly sales plunged below break-even levels. It was ranked fifth by sales value last year versus second in 2023.
Its CEO Zhu spent 19 years at the Shenzhen branch of state lender China Construction Bank before joining Vanke in 2012 and becoming chief executive in 2018.
Hours after The Economic Observer report, after midnight today, a post appeared on Zhu’s WeChat social media account, said friends, declining to be identified as the post was private. A screenshot shared by the friends showed the post was a forward of an advertisement from Vanke’s rental apartment unit.
“People would still be worried after the post; we still don’t know how the company is doing,” said UOB Kay Hian director Steven Leung.
“If even a developer with a state-owned major shareholder got into trouble, it could mean more private developers could head that way too.” — Reuters