Yu Liang

Yu Liang has a background in finance. He graduated from the Department of International Economics at Peking University in 1988, worked early in his career at Shenzhen Foreign Trade Group, and joined Vanke in 1990 on the introduction of his classmate Guo Jun. During the 1994 “Junan-Vanke dispute,” Junan Securities, together with Hainan Securities and others, proposed reorganising the board; according to people familiar with the matter, Yu Liang, who had an economics background, helped Wang Shi communicate with the China Securities Regulatory Commission, enabling Vanke to obtain the first trading suspension in the history of China’s stock market; he then went to Hainan in person and secured the support of Hainan Securities’ 1.1% stake, and within five days the episode ended with Vanke holding a press conference to announce its victory. On February 15, 2001, Vanke’s board approved a motion accepting Yao Muming’s resignation as general manager and appointing Yu Liang as general manager, and the resolution announcement was published on February 16. The 36-year-old Yu Liang thus began running the company; at the time the real estate business generated operating revenue of 2.449 billion yuan for Vanke.

After becoming general manager, Yu Liang adjusted the strategy, removing relatively abstract performance indicators such as regional development and focusing on indicators from the first three pages of the financial statements, such as return on capital, profit margin and inventory turnover; five years later Vanke’s sales exceeded 10 billion yuan. When he drew up a plan to exceed 100 billion yuan in sales within ten years, Wang Shi reminded him to stay calm, and Yu Liang broke the goal down and advanced in small, quick steps. In 2007 Vanke was the first to break through 50 billion yuan; during the 2008 financial crisis Vanke recorded its first negative growth, after which Yu Liang became even more committed to the fast-turnover model, believing that when macro controls and financing channels tightened, the model was crucial for keeping a large company’s funding chain flowing. In 2009 Vanke’s sales recovered to 60 billion yuan, and in 2010 they broke through 100 billion yuan, completing the 100-billion plan in only five years. Along with rapid growth came quality problems: quality issues emerged at Shanghai Vanke’s Jinse Yazhu project, Greentown Group chairman Song Weiping mocked Vanke’s products as crude, and Wang Shi warned that if Vanke pursued profit single-mindedly it could face a crisis in the post-100-billion era. Wang Shi said that in 2011 he set a hard cap for Vanke under which annual sales could not exceed 140 billion yuan; Vanke’s actual sales that year were 121.54 billion yuan, within the cap, and its sales in the same period were 1.7 times those of Poly Real Estate, 3.9 times those of Gemdale and 5.8 times those of China Merchants Property.

Around 2010, Yu Liang publicly acknowledged the gap between Vanke and COLI. According to an April 2010 report by the Economic Observer, in 2009 Vanke’s operating revenue was 48.88 billion yuan, its sales exceeded 60 billion yuan for the first time and its net profit was 5.33 billion yuan, while COLI’s net profit in the same year was HK$7.47 billion; Yu Liang said Vanke’s real rival was COLI. The report also mentioned that the average land price of Vanke’s newly added land reserves in 2007 once reached 3,581 yuan per square metre, and that at the end of 2008 it made inventory impairment provisions of 1.23 billion yuan for 13 projects. At the end of that year, Yu Liang revealed for the first time that Vanke would increase its reserve of held properties, launching elderly care properties, hotels and commercial facilities, with residential still accounting for 80%.

In 2011 Yu Liang put forward the theory that real estate had entered its “second half,” and in 2012 he elaborated on it in an article in Caixin Weekly: the second half did not mean the golden age was over, but was a correction to the glory of the first half, and the core conclusion was that real estate should not aspire to be the protagonist and pillar industry of the national economy, but should become a supporting industry for urbanisation. He judged that regulation would become long-term and that the real estate winter would last a long time; Vanke regarded the winter as a strategy and needed to have money on hand to keep warm. The second half would be driven entirely by owner-occupier demand, requiring the building of “good homes” and the provision of “good services” and “good neighbours”; Vanke strove to be a “three-good student,” no longer pursuing scale as its first priority, and slowing down to find a matching business model. Yu Liang said that in the second half Vanke would stick to fast turnover, neither hoarding land nor holding back units, developing and selling land as soon as it was acquired, and raising returns through turnover rather than gross margin; the model of hoarding land and holding back units might die in the long, harsh winter, and in future gross and net margins would converge, requiring refined management to improve shareholder returns. He believed the industry still had room, that housing in cities such as Shenzhen was basically saturated but old-district redevelopment opportunities would follow, that elderly housing and tourism property were not yet fully covered, and that China still had 80,000 developers, so the era of oligopoly was far from arriving. At the policy level, he advocated top-level design and overall coordination, said the original purpose of a property tax must first be made clear, and supported reform of the presale system while noting that alternative means needed to be considered.

On June 27, 2013, Vanke announced for the first time its transformation into an “urban supporting services provider.” In 2014, Yu Liang called the next decade the silver age, believing that the age when gold was everywhere was over and that single-digit growth would become the norm. At the 2013 annual investor results meeting on March 10, 2014, he said the internet was a tool and Vanke was trying to sell homes online, and proposed “cutting administration and strengthening the troops” and flat management, with headquarters responsible for incubating new businesses and the residential business delegated to four regions for execution; in the same period he led visits to companies such as Tencent and Xiaomi, hoping to graft internet thinking onto the company to find a path to transformation.

In March 2014, Vanke launched its business partner system, comprising a group shareholding plan and project co-investment. In May 2014, the first 1,320 partners entrusted the rights in their economic profit bonus accounts to Ying’an Partnership, which bought Vanke shares on the secondary market through the Jinpeng asset management plan, with the subordinated tranche consisting of the partners’ accumulated bonuses and the senior tranche coming from bank wealth management products. By October 2014, it had bought a cumulative 3.1 billion yuan of shares, holding 3.2%, and became the second-largest shareholder. Yu Liang said versions 2.0 and 3.0 would extend co-investment to project partners and general contractors, and version 4.0 might introduce public crowdfunding. The economic profit bonus was drawn at 10% of the year’s economic profit, the lock-up period was extended from three years to 10 years, and in loss-making years 10% would be deducted. The organisational structure shifted towards flatness, with headquarters staff kept below 200, and from 2015 the four regional headquarters were converted into business units bearing operating responsibility. At the spring 2014 regular meeting, Yu Liang looked back on the 1994 “Junan-Vanke dispute,” saying that had Vanke not found Junan’s weak point at the time, it might have been broken up by “barbarians”; citing Barbarians at the Gate and the KKR buyout, he pointed out that Vanke’s share price was low, that buying it would take only 20 billion yuan, that management was highly paid and had ideas for change but took no action, and said that “barbarians” knocking at the door was normal and the company must summon the courage to defeat them. He also recommended The King of Capital, saying the partner system was better than the professional manager system, with participants creating value for the company, shareholders and investors while also generating returns for themselves. The business partner system had four characteristics: controlling one’s own destiny, forming back-to-back trust, growing the business and sharing achievements; the specific measures were, first, the co-investment system and, second, a partner shareholding plan at group level, under which some two hundred-plus recipients of economic profit bonuses became partners jointly holding Vanke shares, with future bonuses to be converted into shares.

Yu Liang divided Vanke’s business into three major segments: residential property, experiential consumption property and industrial property, with residential remaining the main business; he said “ten years from now more than half will still be selling homes,” but the target buyers would shift to blue-collar workers. Consumption experience property would meet community needs such as elderly care, tourism and holidays, socialising and education, while industrial property would be provided in line with each city’s industrial layout; the three were likened to a big tree, a forest and a lawn. At Vanke’s 30th anniversary media briefing on October 25, 2014, Yu Liang said none of China’s property developers had obtained a ticket to the next era, the industry had shifted from a seller’s to a buyer’s market, and transformation was urgent. He said a high gross margin did not mean high returns, that low margins with fast turnover actually produced high returns, and that gross margin was a false proposition; the decline in cash collection rates and turnover speed stemmed from factors such as restrictions on mortgage disbursement, and the way to respond was to sell properties actively.

Vanke has several times in its history been a target for competing “barbarians,” the most serious being the battle for its equity with Baoneng, China Resources and China Evergrande that began in July 2015 and ended only when Shenzhen Metro took a stake. In the first half of 2017, Shenzhen Metro spent about 66.4 billion yuan to acquire a combined 29.38% stake from China Resources and Evergrande, close to the mandatory tender offer threshold. According to Caixin’s understanding, Shenzhen’s top leadership instructed that “Shenzhen does not need one more state-owned enterprise, but must never lose a Vanke.” At the end of June 2017, Yu Liang succeeded the 66-year-old Wang Shi as chairman of the board and continued to push the implementation of the business partner system. In January 2017 China Resources sold all its Vanke shares at 22 yuan per share for a total of 37.2 billion yuan, ending its 17-year relationship as major shareholder; according to Caixin’s understanding, after Fu Yuning succeeded Song Lin as chairman of China Resources in 2014, he took the view that Vanke management’s bypassing of the board in the process of bringing in Shenzhen Metro crossed the bottom line of corporate governance, and once said that the real estate partner system was unsuitable for many central state-owned enterprises.

In 2017, Yu Liang added the footnote “creator of better-life scenarios” to the urban supporting services provider strategy, saying a scenario creator could turn the space of a pool into a stage, and that the two orientations coexisted rather than replacing each other. He used “urban density” to measure transformation models, saying Xiamen Vanke’s urban density of 25% was an ideal state. Xiamen Vanke had the broadest diversification, with non-residential businesses accounting for 60%, and was one of the four city companies with the highest profit margins; Shanghai Vanke’s commercial share of nearly 50% was the highest in the group, and in May 2017 it announced its “tropical rainforest” strategy. Logistics and commercial property became the new Vanke’s strong businesses, second only to property development. On March 15, 2014, Vanke invited GLP CEO Ming Mei to give a lecture, in which he said China would need more than 200 million square metres of additional warehouses in future; in 2015 Vanke established a logistics property company and formally entered the field. On July 14, 2017, a Chinese consortium formed by Vanke and others proposed to privatise GLP at S$3.38 per share for a total of about S$15.9 billion, with Vanke becoming the largest shareholder with a 21.4% stake. In October 2017, Vanke A planned to contribute 1.5 billion yuan to help set up a 6 billion yuan logistics property fund. By the end of September 2017, its logistics property business had entered 25 cities and added 41 projects with a total area of 3.13 million square metres; its own warehousing totalled 5 million square metres, and including GLP’s footprint the total would expand to nearly 60 million square metres.

On April 2, 2020, the Vanke Enterprise Shares Asset Management Center signed a donation agreement with the Tsinghua University Education Foundation, donating all of its assets, 200 million Vanke shares, in a single gift to establish the “Tsinghua University Vanke Special Fund for the Development of Public Health and Health Disciplines” and jointly build the Vanke School of Public Health at Tsinghua University. Speaking as one of the Vanke employees taking part in the donation, Yu Liang said that the COVID-19 pandemic had bound humanity’s fate together, that “staying alive” had become a very real matter, and that being able to let this wealth do something meaningful when society most needed it was the best gift all Vanke people had received in their 36 years of endeavour.

According to Vanke’s 2021 letter to shareholders, the company’s net profit in 2021 declined for the third time in its 31 years as a listed company. Yu Liang said he felt great pressure and should bear responsibility, and that he believed actions would support a stabilisation and recovery of revenue and net profit in 2022. In 2021 Vanke was in the “green tier,” its net operating cash flow had been positive for 13 consecutive years and its financing cost fell to 4.11%; but operating revenue of 452.8 billion yuan rose only 8.0%, and net profit attributable to shareholders of 22.5 billion yuan fell 45.7%. Yu Liang attributed this to the decline in gross margin: the overall gross margin was 21.8%, down 7.4 percentage points, and after taxes it fell from 22.8% to 17.2%, reducing total gross profit by 17.6 billion yuan; investment income fell by 6.9 billion yuan; and impairment provisions reduced net profit attributable to shareholders by about 2.6 billion yuan. Total gross profit of the development business fell by 18.9 billion yuan. He acknowledged that the company had failed to shake off the inertia of high growth, that investment in some cities had chased high prices recklessly with overly optimistic judgements, and that the capabilities of its city companies were uneven. Yu Liang believed the two driving forces of rapid industrialisation and urbanisation were nearing their end, but that housing demand would not disappear and would transition towards upgrading and renewal; residential development remained Vanke’s main business, and competition in the industry was becoming closer to that in manufacturing. At its 30th anniversary the company had extended its positioning from “three-good housing supplier” to “urban supporting services provider,” setting property services, logistics, long-term rental apartments and commercial property as its main directions. In 2021 Onewo’s revenue exceeded 20 billion yuan for the first time, up 32.1%; VX Logistics’ revenue was 3.2 billion yuan, up 69%, with 11.36 million square metres of leasable area under management, and its 1.38 million square metres of cold-chain space ranked first in the industry; Boyu’s revenue rose 14%, with 159,500 units open and an occupancy rate of 95%; and Yinli’s revenue rose 24%. In 2022, with prudent operation and holding the “green tier” as the bottom line, the development business would be led by the Development and Operation Headquarters to advance a “single chessboard” approach, and investment would be concentrated in regions with stable markets and strong operating capability. The letter was signed by Yu Liang and dated March 30, 2022.

On 17 September 2022, Vanke Group signed a strategic cooperation agreement with Midea, and Yu Liang attended the signing ceremony. Under the agreement, the two companies’ cooperation covers centralised procurement, property services and smart parks, long-term rental apartments, EPC construction management, logistics and warehousing, hotels and ice-and-snow resorts, food and catering, and interconnection of employee benefit platforms. In early 2022, Yu Liang judged that the industry had entered an “iron age”, called on Vanke to fight that year with its back to the wall as if it had burned its boats, and said the company faced only two outcomes, survival or death, with no middle state. In 2022 Vanke’s sales were 417 billion yuan, down about one third year on year, and contract liabilities fell from 636.9 billion yuan at the start of the year to 465.6 billion yuan at year-end, and further to 308.6 billion yuan at the end of 2023.

On June 30, 2023, Yu Liang chaired Vanke’s 2022 annual shareholders’ meeting. Reviewing his three-year term at the meeting, he said the real estate industry was in a phase of transition from the old model to the new; although Vanke had realised relatively early that the industry’s rapid growth was unsustainable, its actions had not fully shaken off inertia, leading to problems such as reckless investment and large dispersion in product execution, but it had made progress in investment quality and product competitiveness, the performance of its operating properties had continued to improve, and its asset-liability structure had been somewhat optimised. He believed the market would never be saturated and that the property market always offers new opportunities and is always renewing itself, but seizing opportunities required full-scenario service capabilities; under the old model companies relied on land acquisition and financing, and under the new model, if they still relied only on these two moves, the more land they bought the more mistakes they might make, and the more financing they raised the less safe they might be. He said Vanke would keep doing three things: improving the management of the development business and consolidating its core base; pushing the operating and service businesses from zero to one and from one to ten, then improving their competitiveness, expanding their room for development and cultivating high-quality assets; and always maintaining financial prudence and an industry-leading credit rating. He said the transformation would involve growing pains and that it would take considerable time for revenue from the operating and service businesses to become mainstream, but the company would stick to its strategy of placing equal emphasis on development and on operations and services. Asked to grade his own term, he said the shareholders present were the best graders.

On 20 October 2023, at a media exchange in Xi’an, Yu Liang said that housing demand had shifted from “whether there is housing” to “whether it is good”, that the future central level of residential construction would be 1.0–1.2 billion square metres, and that housing construction had currently overshot to the downside, with new starts that year expected to be under 700 million square metres, back to the 2006 level. Citing data from the Seventh National Population Census, he noted that urban residents’ per capita housing floor area was 38.6 square metres, which, converted into usable area, was only equivalent to Japan’s level in 1983, and that 63% of urban housing had not yet reached the basic threshold for having lifts. He said that since August, policy efforts had released reasonable housing demand, that transaction area in first- and second-tier cities in September had increased 13.4% month on month, and that the first half of October had continued to improve; he suggested that localities tailor policies to each city and speed up implementation, that areas with excessive inventory temporarily slow the pace of land supply, and that land and property whose planned uses were misaligned be considered for change of use. He acknowledged that the pain of the industry adjustment had lasted longer than expected and was still continuing; companies could only get through the cycle by adapting to the times, and Vanke had chosen to give equal weight to development and operating services, the difficulty lying in building the ability to earn small, slow and hard-won money and in whether the business model could close the loop. Citing long-term rental apartments as an example, he said they had returned to profit, and that REITs were as important to property operating businesses as mortgage loans were to residential development; Vanke’s commercial, logistics and rental housing businesses were all actively preparing REITs, and once this channel opened, Vanke could transform from a developer into a real estate company. On 6 November, at an online exchange between Vanke and financial institutions, Yu Liang said that “three feet of ice does not form in a single day”, that the current market situation had very complex causes, and that no single policy could be expected to solve every problem; restoring market purchasing power required three forces to combine, “wanting to buy, being able to buy and needing to buy”; currently the conditions of “needing to buy” and “being able to buy” were both met, and the difficulty lay in restoring homebuyers’ confidence.

In 2023, Vanke’s operating revenue was 465.74 billion yuan, down 7.6% year on year, and its net profit attributable to equity holders was 12.16 billion yuan, down 46.4% year on year, with the net margin falling to 4.39%; revenue from the development business was 401.6 billion yuan, down 9.6% year on year, the pre-tax gross margin was 15.7%, down 4.7 percentage points year on year, and inventory impairment provisions of 4.85 billion yuan were made for projects at risk of impairment (including unconsolidated ones), reducing net profit attributable to shareholders by 3.55 billion yuan. The company’s sales volume still ranked in the industry’s top three, it held 99.81 billion yuan in cash, and its cash-to-short-term-debt ratio was 1.6 times. From late October 2023, prices of Vanke’s onshore and offshore bonds fell repeatedly; Fitch cut its rating from “BBB+” to “BBB” on October 18, Moody’s cut it from “Baa1” to “Baa3” on November 24, and in March 2024 the two agencies further cut it to “BB+” and “Ba1” respectively, both in speculative grade. At the end of 2023, Vanke’s total interest-bearing debt rose to 320.1 billion yuan, its net gearing ratio was 54.7%, and the parent company’s book cash was 18.4 billion yuan. In January and February 2024, Vanke’s contracted sales were only about 33.47 billion yuan. From the end of 2023, Vanke accelerated asset disposals: in December 2023 it sold the management rights of its Banyan Tree hotel for 480 million yuan, in January 2024 it transferred a 6.16% stake in Shenzhen High-Tech Investment to Shenzhen Investment Holdings Co., Ltd., and in February it sold half of its stake in Shanghai Qibao Vanke Plaza at a 30% discount for 2.384 billion yuan. In 2023, total revenue from the operating and service businesses on a full basis was 55.81 billion yuan, up 8.9% year on year. On October 27, 2023, Vanke’s new board approved the appointment of Shenzhen Metro chairman Xin Jie as vice chairman of the board, signalling support from its state-owned shareholder; on October 31 the company clarified on the Hudongyi platform that “there are no problems whatsoever with the fundamentals.” On November 6, Wang Yongjian, director of the Shenzhen State-owned Assets Supervision and Administration Commission, and others publicly expressed strong support for Vanke, saying that if Vanke encountered extreme risks, they would use funds and resources through market-based and law-based means to help hold the bottom line; Xin Jie said Shenzhen Metro would take over some of Vanke’s urban renewal projects in Shenzhen, with the transaction value expected to exceed 10 billion yuan.

At Vanke’s 2023 annual results meeting on March 29, 2024, answering a question from Caijing, Yu Liang said “we will absolutely not lie flat and will certainly get past this stage’s hurdle,” and that the company would step up efforts to revitalise existing assets and turn real estate into movable assets, cutting interest-bearing debt by more than 100 billion yuan over the next two years to ensure the company’s safety. He admitted that although Vanke had recognised the problem of “staying alive” very early, its thinking had not been comprehensive enough, that past standards of prudence might not now fully guarantee the company’s safety, and that bottom-line thinking needed to be strengthened. On April 5, 2024, Vanke said on an investor interaction platform that its only offshore bonds maturing in 2024 were debts equivalent to 5.6 billion yuan due in the second quarter, and that it had already started preparations for refinancing and repayment in advance; the Shenzhen SASAC had coordinated several state-owned enterprises to connect with Vanke, and once all of this was implemented it was expected to help the company release more than 10 billion yuan of liquidity. On April 30, Yu Liang chaired Vanke’s 2023 annual shareholders’ meeting; the company had paid cash dividends for 31 consecutive years since listing, with cumulative dividends of 103 billion yuan and an average payout ratio of 33%, but the board decided not to pay a cash dividend for 2023 for the time being, in order to retain more cash to cope with the industry’s deep adjustment. According to CRIC data, sales by the top 100 developers fell nearly 48% from January to March 2024, while Vanke’s sales fell 43%. President Zhu Jiusheng said at the meeting that the financing model was shifting from unsecured credit borrowing to project-based financing with collateral and closed-loop supervision, and that the guarantee authorisation limit had been raised from 35 billion yuan to 150 billion yuan; 90% of Vanke’s past borrowing had been unsecured credit loans and 80% had been handled through headquarters, and by the end of 2023 it had borrowed nearly 200 billion yuan from banks, of which more than 120 billion yuan had Vanke itself as the borrower. Responding to media reports that Vanke planned to pledge a package of 130 billion yuan of assets for loans, Zhu Jiusheng said the company was sorting out its resources, taking stock of its assets and preparing collateral, and that its collateral and resources were relatively ample.

After 2021 the real estate market was in the doldrums, and at the end of October 2023 Vanke announced it would no longer implement the economic profit bonus scheme. According to Caixin’s understanding, by April 2024, because the share price had fallen below the financing liquidation line, most of the shares bought with the bonuses had been forcibly liquidated; bonuses maturing in mid-2024 were paid out in shares, whose value had depreciated sharply. In early 2024, under liquidity pressure, Vanke negotiated extensions of non-standard debt with several insurance institutions and faced a second credit crisis; in the first half of the year Shenzhen set up a working group, which fully moved in at the end of the year. A profit warning on January 27, 2025 said Vanke expected a loss attributable to shareholders of 45 billion yuan for 2024, its first annual loss since listing. On the same day, Vanke announced that Xin Jie had been elected chairman of the board in place of the 60-year-old Yu Liang, who remained executive vice president and continued as a director; president Zhu Jiusheng resigned from all his positions, and three executives with state-owned backgrounds were parachuted in as executive vice presidents. According to Caixin, this reflected Shenzhen fulfilling its local responsibility and dispatching personnel to take deep control of Vanke in order to defuse its debt risks. On February 5, Vanke publicly announced the proposed appointment of ten new senior managers, most of them from Shenzhen Metro or its subsidiaries; Yu Liang, as executive vice president, assisted Xin Jie and was responsible for strategy and macro research on real estate. According to Caixin, state-owned sector sources said that the share of returns from past co-investment exceeded the standards acceptable to state-owned enterprises, and the incentive mechanism was very likely to change. On January 8, 2026, Yu Liang fully left all his positions at Vanke and formally retired.

Caixin reported in January 2026 that Yu Liang submitted his retirement and resignation report around November 2025, and because it involved a change of Vanke’s legal representative, the procedures were not completed until early January 2026; Caixin also learned from multiple sources that as of late January 2026, Yu Liang had been out of contact since his retirement was officially announced. From the end of 2025, Vanke sought extensions on several domestic bonds, and Yu Liang no longer took part in this round of debt resolution.

According to feedback given to Caixin by a department head who had worked at Vanke’s real estate headquarters, the crux of Vanke’s strategic problem was a fear of slipping from second place in the industry to third or fourth, so it expanded at high speed to keep pace with the leader. Before this expansion, the real estate business already operated under a two-tier regional and city management system, with each region forming a closed loop, the headquarters lacking control, and internal controls absent for years. Only in 2021, when Yu Liang and others noticed that regional heads were getting into trouble one after another and financial problems kept arising, did Vanke re-establish the Vanke Real Estate Development and Operations Headquarters to unify control over residential and commercial real estate. The department head said that the headquarters’ inspection department reviewed every real estate project nationwide and found that more than 100 of over 600 projects awaiting or under construction were outright loss-making, so they were halted or postponed. A review of commercial projects showed that Vanke had developed more than 300 commercial projects of various sizes across the country, more than China Resources and Longfor combined, of which over 30% were loss-making with low net operating income; one reason was that commercial and residential projects shared the same plots, and local heads, in order to raise the profit on residential sales, loaded too much of the land cost onto the commercial projects. The department head believed that Vanke had many shortcomings in project screening, investment decisions and lean operational management, and that the rollout of some projects lacked logic.