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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