China’s Property Crisis Enters a Dangerous New Phase

It was the moment China’s leaders finally blinked.

After four years of standing by as property developers like China Evergrande Group spiraled into default, Communist Party officials decided in late January that China Vanke Co. — one of the country’s last surviving real-estate giants — was, for now at least, too big to fail. Faced with a collapse in Vanke’s bond prices and the company’s warning of a record $6.2 billion loss, officials from the developer’s hometown in Shenzhen stepped in to take operational control. Authorities are working on a proposal to help Vanke plug a funding gap of about $6.8 billion this year.