China’s shadow banking and trust industry, once a pillar of high returns for wealthy investors, is now in crisis due to the property market collapse. The government is letting investors bear the losses, signalling a new era of financial discipline, but at the cost of undermining confidence in the system.
The Zhongrong International Trust Co, which managed $108 billion in 2022, has been deemed insolvent by state-appointed custodians, marking a significant blow to China’s $3.7 trillion trust industry, Bloomberg reported.
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The industry’s woes, including at least 162 high-yielding trust product defaults since 2024, have eroded confidence among China’s elite and could undermine a consumer revival the…
