China’s Zhongzhi Enterprise Group has declared bankruptcy
following a calamitous year in which it sparked fears that the world’s second-largest economy was facing a “Lehman moment.”
A Beijing court accepted Zhongzhi’s bankruptcy and liquidation proposal on Friday, cementing one of China’s biggest corporate failures in recent history.
Zhongrong International Trust, a major subsidiary of the company, had around $108 billion of assets under management at the end of 2022.
But it missed payments on a series of investment products last year, and in November the parent company told investors it had at least $31 billion more liabilities than assets.
WSJ 5 January 2024
https://www.wsj.com/finance/chinese-financial-conglomerate-zhongzhi-declares-bankruptcy-1ce9cdf2
“shadow banking” trusts such as the one owned by Zhongzhi
https://englundmacro.blogspot.com/2023/12/china-big-rebound-in-short-term.html
China Scrambles to Contain a Looming Zhongzhi Shadow-Bank Meltdown
Over the summer, Zhongrong International Trust, which is part of the group, defaulted on many of its high-yielding investment products and fueled fears of financial contagion from China’s worsening property downturn.
In September, two large state-owned financial institutions stepped in to provide assistance to Zhongrong, which had around $108 billion of assets under management at the end of 2022.
Turmoil at Zhongzhi sparks alarm over China’s $3tn shadow financing industry
https://englundmacro.blogspot.com/2023/08/can-rest-of-globe-expand-if-china-is.html
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