Turmoil at Zhongzhi sparks alarm over China’s $3tn shadow finance sector

• Zhongrong, partly owned by investment group Zhongzhi, is one of the biggest players in a $2.9tn shadow financing market, referred to as the trust industry. Doubts over its health have added to mounting concerns about the state of China’s economy, which is struggling to recover after the Covid-19 pandemic.
• Two listed companies said last week Zhongrong had failed to repay trust products, which offer savers and companies higher returns than traditional banks. This followed weeks of speculation over separate missed payments to retail investors from Zhongzhi’s wealth management businesses, which also direct billions of renminbi into savings products.

External Link : https://www.ft.com/content/d150a3c9-4d0b-4d46-b856-153a253d9dbc