The involvement of two Chinese state-owned financial firms in Zhongrong International Trust Co's operations and management may diffuse risk at the troubled shadow bank but does little to ease concerns about missed payments, analysts and investors said, Reuters reported. The shadow bank, which traditionally had sizable real estate exposure, missed payments on dozens of so-called trust products since late July, roiling markets and raising fears that China's financial system may be at risk from the property sector crisis. Angry retail investors in Zhongrong's trust products last month held protests in Beijing and lodged complaint letters with regulators, pleading with the authorities to step in after the missed payments. Zhongrong said in a statement late on Friday it had signed an agreement with Citic Trust and CCB Trust - the shadow banking arms of two state-owned firms Citic Group and China Construction Bank - for so-called "entrusted management services".
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