Two clients of Chinese trust company Zhongrong International Trust Co (中融國際信託) said the firm delayed payment of maturing wealth products amid reports of liquidity concerns at a major shareholder, the latest sign of turmoil in China’s financial sector.
Nacity Property Service Co (南都物業) and KBC Corp (金博碳素) first announced news of the delayed payments in statements on Friday evening.
KBC, a carbon products manufacturer, said in a statement with the Shanghai Stock Exchange that the delayed payments were tied to 60 million yuan (US$8.3 million) invested with Zhongrong and would not affect company operations.
Photo: Bloomberg
Chinese asset management firm Zhongzhi Enterprise Group Co (中植企業) — a financial giant in China whose business cuts across trusts companies, private equity and wealth management — has an ownership stake in Zhongrong.
Late last week, there was speculation that the delayed payments were related to a liquidity crisis at Zhongzhi, which has about 1 trillion (US$138.19 billion) yuan in assets under management, according to Caixin.
Representatives for Zhongrong could not be reached for comment yesterday outside of business hours.
The news of Zhongrong’s delayed payout comes as investors have been on edge recently over concerns of the health of China’s economy and financial markets.
The trust industry has also been pressured by the crisis in China’s property sector in recent years, with companies defaulting on investment products linked to property developers in the past.
Firms including Zhongrong and MinMetals Trust Co (五礦信託) bought stakes in at least 10 real-estate projects last year, betting that unfinished homes will eventually yield cash to pay off some of the US$230 billion in property-backed funds they have issued to investors.
One of China’s largest developers, Country Garden Holdings Co (碧桂園), unsettled markets last week amid fears of a default as it reported steep losses in the first half of the year.
The company said in filings to the Shenzhen Stock Exchange on Saturday night that it would suspend trading in nearly a dozen onshore bonds starting today, adding to concerns about the potential drag the industry will have on growth in the world’s second-largest economy.
China’s trust industry combines characteristics of commercial and investment banking, private equity and wealth management. Firms in the sector pool household savings to offer loans and invest in real estate, stocks, bonds, commodities, and even bottles of sorghum liquor. No other firms in the financial industry operate across all these asset classes.
TECH BOOST: New TSMC wafer fabs in Arizona are to dramatically improve US advanced chip production, a report by market research firm TrendForce said With Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) pouring large funds into Arizona, the US is expected to see an improvement in its status to become the second-largest maker of advanced semiconductors in 2027, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report last week. TrendForce estimates the US would account for a 21 percent share in the global advanced integrated circuit (IC) production market by 2027, sharply up from the current 9 percent, as TSMC is investing US$65 billion to build three wafer fabs in Arizona, the report said. TrendForce defined the advanced chipmaking processes as the 7-nanometer process or more
Who would not want a social media audience that grows without new content? During the three years she paused production of her short do-it-yourself (DIY) farmer’s lifestyle videos, Chinese vlogger Li Ziqi (李子柒), 34, has seen her YouTube subscribers increase to 20.2 million from about 14 million. While YouTube is banned in China, her fan base there — although not the size of YouTube’s MrBeast, who has 330 million subscribers — is close to 100 million across the country’s social media platforms Douyin (抖音), Sina Weibo (新浪微博) and Xiaohongshu (小紅書). When Li finally released new videos last week — ending what has
OPEN SCIENCE: International collaboration on math and science will persevere even if the incoming Trump administration imposes strict controls, Nvidia’s CEO said Nvidia Corp CEO Jensen Huang (黃仁勳) said on Saturday that global cooperation in technology would continue even if the incoming US administration imposes stricter export controls on advanced computing products. US president-elect Donald Trump, in his first term in office, imposed restrictions on the sale of US technology to China citing national security — a policy continued under US President Joe Biden. The curbs forced Nvidia, the world’s leading maker of chips used for artificial intelligence (AI) applications, to change its product lineup in China. The US chipmaking giant last week reported record-high quarterly revenue on the back of strong AI chip
Qualcomm Inc’s interest in pursuing an acquisition of Intel Corp has cooled, people familiar with the matter said, upending what would have likely been one of the largest technology deals of all time. The complexities associated with acquiring all of Intel has made a deal less attractive to Qualcomm, said some of the people, asking not to be identified discussing confidential matters. It is always possible Qualcomm looks at pieces of Intel instead or rekindles its interest later, they added. Representatives for Qualcomm and Intel declined to comment. Qualcomm made a preliminary approach to Intel on a possible takeover, Bloomberg News and other media
RSS