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China’s property debt woes deepen with developer Vanke under closer scrutiny
International desk
08 Mar 2024, 12:34
China’s property debt crisis is showing new signs of trouble after entering its fourth year, with one of the country’s major state-backed developers placed under unprecedented scrutiny by investors.
Some of China’s largest insurers are sounding an alarm over the debt risks of China Vanke, according to people familiar with the matter, as shares and bonds of the major developer hit record lows on repayment concerns.
At least two Beijing-based insurers that farm out annuity investments told their external portfolio managers late last week to closely monitor Vanke’s credit risks, said the people, asking not to be identified discussing a private matter. One life insurer also told its pension managers to curb exposure, the people added.
Meanwhile, Vanke, China’s second-biggest developer by sales, has begun a new round of negotiations with several state insurers in recent days to extend maturities of some private borrowings, the people said. No agreement has been reached so far.
The warnings about Vanke’s risks are particularly worrisome and threaten to elevate the sector’s debt woes to the next level because the company is seen as a bellwether for Beijing’s support for major developers with strong ties to the state.
The company is also one of China’s few remaining and surviving investment-grade builders, following a record wave of defaults that engulfed mostly private-sector builders, including former industry giants Country Garden Holdings and China Evergrande Group.
The growing concerns about Vanke also come at an inconvenient time for the authorities as the nation kicked off its seven-day-long annual parliamentary sessions on March 5, with key policy topics from the housing crisis to local government debt in focus.
President Xi Jinping’s government has maintained an economic growth target of around 5 per cent for 2024 and plans to issue one trillion yuan (S$190 billion) of ultra-long special central government bonds in a rare move to shore up growth.
Vanke did not respond to a request for comment.
“It is no surprise that Vanke is in trouble today,” said Beijing Shengao Fund Management chief investment officer Li Kai. “Domestic real estate sales have been so poor that it is difficult for companies to hang on, and the market has not seen strong visible support from local governments.”
The developer’s shares and bonds extended a sell-off on March 4. Its stock fell 7.1 per cent in Hong Kong at their lowest level ever, and dropped 4.7 per cent in Shenzhen, the biggest decline since December 2022. Some of Vanke’s yuan bonds also hit their lowest levels, according to Bloomberg-compiled prices, while its 3.975 per cent US dollar note due in 2027 fell by more than six US cents to 47.3 US cents.
It is not the first state-linked Chinese developer to be in trouble. China South City Holdings and Sino-Ocean Group Holding, two such firms, are also on the list of defaulters. But their sizes and impact are nowhere near Vanke’s.
“If Vanke does have a redemption risk, I think it will be comparable to the impact on the market of Country Garden’s default, and will directly hit other private real estate developers that are still struggling to support themselves,” said Beijing Shengao’s Mr Li.
Vanke’s Hong Kong-listed shares may remain weak until there is a sales recovery or stronger support from the Shenzhen government, according to JPMorgan Chase analysts, who forecast a 20 per cent to 30 per cent yearly drop in the developer’s full-year earnings.
Source: Straitstimes
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NATO Chief Rutte Talks Security With Trump in Florida
NATO Secretary-General Mark Rutte has met with President-elect Donald Trump in Palm Beach, Florida, NATO spokesperson Farah Dakhlallah announced Saturday.
Palm Beach, Florida is the location of Trump's Mar-a-Lago estate.
The two leaders "discussed the range of global security issues facing the alliance," Dakhlallah said, without revealing further details.
Trump is expected to push NATO members to pay more in defense expenditures in his second term, pushing for allies to spend 3% of their GDP on defense. In the past, Trump has also claimed that he "would encourage" Russia to "do whatever the hell they want" to countries that he deems are not paying their bills.
Trump has also said he opposes further military aid to Ukraine, an idea which many European NATO members find disheartening.
Trump has nominated Matthew Whitaker to be US ambassador to NATO. Whitaker is expected to pursue Trump's "America First" agenda during talks with NATO allies.
Rutte wished to speak with Trump on growing Russia-North Korea ties
Rutte had earlier expressed willingness to visit Trump at Mar-a-Lago after Trump was victorious over Kamala Harris in the November 5 US presidential election.
Rutte had earlier said he wanted to speak with Trump on North Korea, Iran, China, and Russia "working together, working together against Ukraine."
"At the same time, Russia has to pay for this and one of the things they are doing is delivering technology to North Korea," Rutte said during a recent meeting of European leaders in Budapest. He said this development is threatening to the US and continental Europe.
"I look forward to sitting down with Donald Trump to discuss how we can face these threats collectively," the NATO chief had said.
More Countries Vow to Arrest Netanyahu Under ICC Warrant
Several countries, including France, Belgium, the Netherlands, Ireland, and Canada, have announced their intention to adhere to the International Criminal Court's (ICC) arrest warrant against Israeli Prime Minister Benjamin Netanyahu on charges of alleged war crimes.
The ICC on Nov. 21 said that Netanyahu and his former Defense Minister Yoav Gallant may bear "criminal responsibility" for the war crime of starvation as a method of warfare and other crimes against humanity against Palestinians in the besieged Gaza Strip. The court also issued a warrant for Mohammed Deif, head of Hamas’ armed wing, over the group’s attack on Oct. 7, 2023.
The Hague-based court's decision drew mixed reactions from world leaders, with some vowing to arrest the Israelis if they entered their country's territory. The warrant marked the first time that a sitting leader of a major Western ally has been accused of war crimes and crimes against humanity by a global court of justice.
The stance taken by these countries — particularly those in the West — holds significant implications for Israel's diplomatic relations and its trajectory toward potential political isolation.
EU foreign policy chief Josep Borrell said the warrants are binding for all 27 members.
France signaled it could arrest Netanyahu if he came to its territory, with Foreign Ministry spokesman Christophe Lemoine calling it a “complex legal issue” but said France supports the court’s actions.
“Combating impunity is our priority,” he said. “Our response will align with these principles.”
The Netherlands also announced that it will arrest Netanyahu if he sets foot in the country, adding that Amsterdam will cut all non-essential contacts with the Israeli government.
Following the announcement, a visit by the Dutch foreign minister to Israel has been postponed.
Italy, Switzerland, Ireland, Spain, Norway, and Slovenia all said they would meet their commitments and obligations regarding the Rome Statute and International Law. Austria said the same, though its Foreign Minister Alexander Schallenberg added that the warrant was absurd.
“The fight against impunity wherever crimes are committed is a priority for Belgium, which fully supports the work of the ICC," Belgium's Foreign Ministry said on X. "Those responsible for crimes committed in Israel and Gaza must be prosecuted at the highest level, regardless of who committed them."
Germany, on the other hand, said that it is "examining" how to respond to the decision.
"We are now of course examining exactly what that means for implementation in Germany," Germany's Foreign Minister Annalena Baerbock said.
Whether German authorities would move to arrest Netanyahu is currently "theoretical,” Baerbock said.
Canada also affirmed its support and compliance with the decision.
"First of all, as Canada has always said, it's really important that everyone abide by international law. This is something we've been calling on from the beginning of the conflict," Prime Minister Justin Trudeau told reporters in Toronto.
Many analysts posit that this development could edge Israel closer to international ostracism, with calls for arms embargoes against the nation gaining momentum. Such measures are no longer merely political but now carry a legal dimension, as supplying weapons to Israel risks complicity in internationally recognized crimes.
Other leaders, including U.S. President Joe Biden, have condemned the court's decision which Netanyahu dismissed as "absurd" and "driven by anti-Semitic hatred of Israel.”
"The ICC issuance of arrest warrants against Israeli leaders is outrageous," Biden said in a statement.
"Let me be clear once again: Whatever the ICC might imply, there is no equivalence, none, between Israel and Hamas. We will always stand with Israel against threats to its security."
Argentina "declares its deep disagreement" with the decision, which "ignores Israel's legitimate right to self-defense against the constant attacks by terrorist organizations like Hamas and Hezbollah," President Javier Milei posted on social media platform X.
In a rare move, Hungarian Prime Minister Viktor Orban, whose country holds the EU's rotating presidency, said he would invite Netanyahu to visit and defy an ICC arrest warrant.
Orban called the ICC's decision "outrageously brazen” and "cynical,” saying it "intervenes in an ongoing conflict... dressed up as a legal decision, but in fact for political purposes.”
"There is no choice here, we have to defy this decision," the nationalist leader said in his weekly interview with state radio.
British King Charles May Visit Bangladesh
King Charles III of the United Kingdom is reportedly planning a state visit to the Indian subcontinent. According to a report by The Daily Mirror, the British monarch, who has refrained from international travel following a cancer diagnosis earlier this year, may visit Bangladesh, India, and Pakistan in the near future.
The report, published on Friday, stated that King Charles III and Queen Camilla are preparing for a future tour of the subcontinent. As the king gradually recovers from cancer, this visit may mark his return to official international engagements. The plan to visit the Indian subcontinent is seen as a sign of significant improvement in his health.
However, The Daily Mirror did not provide specific details about when this royal tour might commence.
After the passing of Queen Elizabeth II in September last year, King Charles was compelled to cancel all official tours. However, this planned visit to Bangladesh, India, and Pakistan could mark the resumption of his international travel. The visit aligns with Britain's post-Brexit strategy to establish meaningful economic connections worldwide. Royal visits play a pivotal role in achieving this goal.
A source close to the monarchy noted, "Planning such tours for the King and Queen is very encouraging. The proposed visit to the Indian subcontinent will carry immense political and cultural significance for Britain on the global stage. At this time, King Charles and Queen Camilla are the most fitting ambassadors for the UK."
According to The Daily Mirror, the UK Foreign Office has given the green light to begin discussions with potential host nations. Draft plans are being prepared for visits to Bangladesh, India, and Pakistan. Indian Prime Minister Narendra Modi had previously expressed interest in hosting the King and Queen after their India tour was canceled last year.
However, there is some concern surrounding the royal visit to India, given Prime Minister Modi's growing ties with Russian President Vladimir Putin. The two leaders recently met at the BRICS summit, and President Putin has welcomed India’s "strategic partnership" with Russia. Despite this, Modi has emphasized that the ongoing war in Ukraine should be resolved "peacefully."
Notably, King Charles, accompanied by Camilla, toured Pakistan for a week in 2006 as the Prince of Wales. During that visit, he remarked to well-wishers, "It’s taken me almost 58 years to get to you. But I can assure you, it hasn’t been for lack of trying."
ASEF Executive Committee Meeting Held in Singapore
The Executive Committee Meeting of the Asia-Europe Foundation (ASEF) concluded in Singapore on 22 November 2024 with a renewed commitment to further collaboration between the countries from the two continents, Asia and Europe.
The Director-General, Regional Organizations of the Ministry of Foreign Affairs, Md. Rais Hasan Sarower, NDC, as the current chair of the ASEF Board of Governors, led the discussion.
In addition to discussions on a wide range of administrative and financial matters, the executive body also provided directives to enhance the visibility of the organization and recommended exploring new funding mechanisms and ensuring data privacy and strategic upgrades to make ASEF more meaningful for member states.
The meeting also approved a project proposal for women, peace, and security training proposed by the Government of Latvia.
To complement the ASEM process, in February 1997, the 1st ASEM Foreign Ministers' Meeting welcomed the establishment of the Asia-Europe Foundation (ASEF). Based in Singapore, ASEF provides opportunities for Asians and Europeans to exchange ideas and collaborate, and achieve innovative and substantive solutions for common global challenges.
Bangladesh has been the Chair of the ASEF Board of Governors for the first time since January 2024 and the term will end in December 2024.
UNGA Decides to Hold High-Level Conference in 2025 to Propose a Time-Bound Plan
UNGA resolution decides to hold an all-stakeholder high-level UN Conference in 2025 to propose a time-bound plan for sustainable resolution of the Rohingya crisis.
"For us and the for sake of regional as well as international security, creating conditions for the safe, voluntary, and dignified return of the Rohingyas to Myanmar is of the utmost importance" – said Ambassador Muhammad Abdul Muhith, Permanent Representative of Bangladesh to the United Nations while delivering statement after the adoption of the resolution on Rohingya Crisis at the Third Committee of the United Nations General Assembly (UNGA) today.
The resolution entitled "The situation of human rights of Rohingya Muslims and other minorities in Myanmar", jointly tabled by the OIC and the EU has been adopted in the Third Committee of the UNGA by consensus which was cosponsored by 106 countries, marking a significant level of international support.
Through the resolution, member states decide to hold an all-stakeholder high-level conference, at the earliest possible time in 2025, on the situation of Rohingya Muslims and other minorities in Myanmar, to review the overall crisis to propose a comprehensive, innovative, concrete, and time-bound plan for a sustainable resolution of the crisis, including voluntary, safe and dignified return of Rohingya Muslims to Myanmar. The organization of the high-level Conference was a call from the Hon'ble Chief Adviser of Bangladesh, Professor Muhammad Yunus, during the high-level week of the 79th UNGA in September.
This year, the resolution, among other issues, called to ensure the right to return of all refugees, including Rohingya Muslims taking shelter in other countries, and take concrete actions to create conditions necessary for voluntary, safe, dignified, and sustainable return and reintegration. It recognizes and highlights the serious human rights violations and abuses including killings, destruction and burning of houses, hindrance in accessing humanitarian assistance, and forced recruitment of civilians, particularly Rohingya Muslims and other minorities including children. It also reaffirmed its commitment to support all accountability processes to bring the perpetrators to justice. The resolution further emphasizes the critical role of ASEAN as a regional organization and highlights its initiatives in fulfillment of the five-point consensus in its entirety.
In his statement, Ambassador Muhith described, how the protracted presence of the Rohingyas in Bangladesh, has created a complex and worrisome situation. He expressed disappointment that no real progress could be made in the last seven years to address the root causes of the crisis.
Referring to the Security Council resolution and the resolution adopted today in the Third Committee of the General Assembly, he urged the international community to take necessary actions in creating conditions necessary for the return of Rohingya Muslims. He also emphasized adequate funding for the humanitarian response plan to support the Rohingya Muslims, pending their return.
The adoption of the resolution by consensus is a significant step forward, demonstrating the strong commitment of the international community towards a durable resolution of the crisis.
Calin Georgescu Leads Romania's Presidential Race in First Round
Far-right nationalist Calin Georgescu has emerged as the frontrunner in Romania’s presidential election, securing 22% of the vote in the first round, according to preliminary results. Pro-European Prime Minister Marcel Ciolacu trailed closely with 20%, with the final results determining which two candidates will advance to the decisive run-off on December 8.
A Surprising Upset in Romanian Politics
Georgescu’s rise as an independent candidate has upended expectations in the closely watched election. Known for his nationalist rhetoric and criticism of Romania’s alignment with NATO and the EU, Georgescu bypassed traditional campaign methods, relying instead on TikTok to attract young and disenchanted voters.
Prime Minister Ciolacu, a veteran of the populist Social Democrats, represents a continuation of Romania’s pro-European stance and efforts to address domestic economic challenges. His focus on stability and social reforms contrasts sharply with Georgescu’s sovereignty-centered platform, which calls for a reevaluation of Romania’s international alliances.
Economic Struggles Fuel Anti-Establishment Sentiment
Romania’s economic woes have heavily influenced the election. With the highest poverty risk in the EU, affecting 35% of the population, and rising inflation exacerbating the cost of living, many voters have turned to anti-establishment candidates. Georgescu’s criticism of Romania’s "subservience" to NATO and the EU, including opposition to the NATO missile defense shield in Deveselu, resonated with voters seeking change.
Ciolacu, meanwhile, has promised to leverage EU funding to tackle inequality and improve living standards. He has also reaffirmed Romania’s commitments to NATO and its support for Ukraine amid the ongoing war.
Broader Implications of the Run-Off
Romania’s presidency holds significant influence over foreign policy, making this election pivotal for the country’s international positioning. A victory for Georgescu could signal a shift toward nationalist policies, potentially weakening Romania’s ties with NATO and the EU and aligning the country more closely with Russian interests. Conversely, a win for Ciolacu would likely sustain Romania’s current pro-Western trajectory, reinforcing its role in European security and economic frameworks.
A Rising Far-Right Tide
Georgescu’s success mirrors the growing influence of far-right populism across Europe, where economic grievances and disillusionment with traditional elites have fueled nationalist movements. His unorthodox use of TikTok has highlighted the increasing role of social media in mobilizing younger voters, bypassing traditional political channels.
As Romania prepares for the December 8 run-off, the outcome will shape the country’s domestic and foreign policies for years to come. The election has become a referendum on competing visions—pro-European stability versus nationalist sovereignty. With turnout and voter mobilization poised to be decisive, Romania’s future direction hangs in the balance.
DHL Cargo Plane Crashes Near Vilnius Airport in Lithuania
A cargo plane flying on behalf of German logistics company DHL crashed near Vilnius International Airport in Lithuania early on Monday, killing at least one person, according to Lithuanian officials.
The deceased person was confirmed by Lithuanian police to be a Spanish national and a member of the flight crew, although not one of the pilots.
The other occupants of the plane — a German, a Lithuanian, and another Spaniard — were reportedly injured, but their condition remained unclear.
What did DHL say?
"We can confirm that today, at approximately 4:30 am CET [0330 GMT], a Swiftair aircraft, operated by a service partner on behalf of DHL, performed an emergency landing about one kilometer from VNO Airport [Vilnius, Lithuania] while en route from LEJ Airport [Leipzig, Germany] to VNO Airport," the German company said.
A spokesperson for DHL Lithuania told the Reuters news agency that the company has opened an investigation, adding: "We do not have any information that any of the parcels onboard the crashed cargo plane were suspicious."
German investigators also said they were "in close contact with the involved parties at home and abroad to clarify the issue as soon as possible."
Aircraft manufacturer Boeing also said it was "working to gather more information" and stood "ready to provide any support."
What do we know so far about the DHL crash?
The plane, operated by Swiftair, had originated in the German city of Leipzig, which is a hub for DHL.
"It fell a few kilometers before the airport, it just skidded for a few hundred meters, and its debris somewhat caught a residential house," Renatas Pozela, the head of the Lithuanian rescue service said.
"Residential infrastructure around the house was on fire, and the house was slightly damaged, but we managed to evacuate people," he added.
Twelve residents were evacuated from the building, according to officials.
Vilnius Mayor Valdas Benkunskas said the plane missed the house "by chance" and crashed into the courtyard.
The cause of the crash is still unknown, and terrorism is not being ruled out
The cause of the crash was not immediately known, but Lithuania's police chief Arunas Paulauskas did not rule out terrorism as a motive.
"This is one of the versions that need to be investigated and verified. There is still much work ahead of us," Paulauskas said at a press briefing.
"These answers will not come so quickly," he added, saying that the crime scene probe, evidence collection, and gathering of information and objects could take an entire week.
According to data from rescue services, emergency crews were alerted about the crash at 5:28 a.m. local time (0328 GMT).
"City services are currently onsite, along with a fire truck and a command team from Vilnius Airport," the Lithuanian airport authority posted on X.
"Airport operations are not disrupted at this time."
Series of cargo-related incidents
German security services warned back in August of "unconventional incendiary objects" being posted via cargo services.
Warnings were issued in connection to an object that caught fire at DHL's Leipzig logistics center in July, having reportedly been sent from the Baltic States.
Also in July, similar incidents were reported when devices caught fire at courier depots near Warsaw, Poland, and Birmingham in the United Kingdom, with Lithuanian Prosecutor General Nida Grunskiene saying that packages had originated in Lithuania.
Both Poland and Lithuania share borders with the Russian exclave of Kaliningrad, and sabotage was not ruled out.
"I can state that this is part of unconventional kinetic operations against NATO countries that are being undertaken by Russian military intelligence," Kestutis Budrys, a national security adviser to Lithuanian President Gitanas Nauseda, told the Reuters news agency earlier in November.
"We note that these operations are being escalated: their focus is moving ... to harming infrastructure and actions that could end up killing people," he added.
Moscow has denied the accusations.
