China’s leaders look to have blinked in their property face-off

I f you are going to buy a flat in China, common advice goes, you should buy it from a “model student”. That is, a developer who has followed the rules, kept debts under control and refrained from excessive expansion. Vanke, a Shenzhen-based firm and one of China’s biggest homebuilders, once qualified as such. Its name appears on lists of China’s strongest developers. It has a good record of completing homes on time. Most important, it is state-backed. So it is all the more surprising that Vanke is now flunking out of school and may become the first developer in the current property crisis to receive a bail-out.