Posted 1/27/2024, 4:28:09 PM
Chinese Shadow Bank Zhongzhi Declares $36B Bankruptcy, Exposing Crisis in Property Sector
- Zhongzhi Enterprise Group, a Chinese shadow bank, declared bankruptcy on Jan. 5, 2023, exposing deepening issues in China's property sector
- Zhongzhi assessed its total obligations at $59B-$65B but only had $28.2B in assets, indicating a $36.4B deficit
- Zhongzhi attributed its bankruptcy to the death of its founder, departure of executives, and failure of a "self-rescue" plan
- China's property sector accounts for 24% of GDP; sales have plunged amid debt crisis, hurting major developers
- S&P projects China's GDP could fall to 2015 levels in worst case as property sales may hit $1.4T, sparking more liquidity issues