Posted 11/27/2023, 12:58:44 AM
China's Zhongzhi Enterprise Group Declares Severe Insolvency, Exposing Cracks in Shadow Banks Tied to Troubled Property Sector
- Zhongzhi Enterprise Group, one of China's largest shadow banks, declared itself "severely insolvent" and unable to repay investors
- Zhongzhi has up to $56 billion in liabilities exceeding its assets, revealing cracks in China's stressed financial system
- Trust companies like Zhongzhi are heavily exposed to China's troubled property development sector
- Beijing is considering new support measures like bank loans for distressed developers to halt the sector's downward spiral
- Allowing failing developers to fail risks destructive waves in China's economy; intervening risks banks taking on bad loans