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China Trust’s Missed Payments Highlights Slowdown Risks – SCMP

Fears that China’s economic downturn will hit the financial sector have risen after Zhongrong International Trust missed payments of $19.3 million last week

News that two Chinese state financial firms will help cut risk at Zhongrong Trust is expected to do little for investors, analysts say.
Signs of trouble at the Zhongzhi group came to light in July when Zhongrong Trust, which Zhongzhi controls, missed payments on dozens of investment products. Image: Handout.


Concern that China’s economic slowdown will spur “liquidity problems in the financial sector” have arisen after state-backed Zhongrong International Trust missed principal and income payments of 140 million yuan ($19.3 million) of wealth-management products sold to several listed companies, according to report by the South China Morning Post on Monday (August 14), which noted that the Harbin-based trust failed to repay 60m yuan in principal and 4.26 million yuan of investment gains on two products last week, citing an exchange statement by Shanghai-listed KBC.

Nacity Property Service Group also said in a filing on Saturday that it did not receive 30 million yuan of principal Zhongrong was due to pay last week, while Xiaheng International Science and Technology also said the trust failed to make repayments on three products, the report said, adding that an analyst said Zhongrong’s possible defaults “will sour sentiment on the market, particularly the non-banking financial companies”.

Read the full report: SCMP.




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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


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