Chinese Wealth Firm Zhongzhi Files for Bankruptcy Amid Real Estate Crisis, Sparking Financial Contagion Worries
• Zhongzhi Enterprise Group, a major Chinese wealth management firm, filed for bankruptcy due to heavy losses in the struggling real estate sector • The firm's subsidiary, Zhongrong International Trust, had at least $31 billion more in liabilities than assets • Zhongzhi's failure raises contagion concerns that could threaten other financial institutions • The real estate crisis has led to defaults from companies responsible for 40% of Chinese homes since 2021 • Foreign investors pulled $31 billion from Chinese markets in 2023, with an estimated $65 billion more to exit in 2024