Looming China Default Shines Light on New State Asset Managers

As investors brace for the biggest dollar default by a Chinese government-owned borrower in decades, a new breed of state asset managers tasked with cleaning up the mess is gaining equal attention, Bloomberg News reported. Trading firm Tewoo Group Corp., a onetime Fortune Global 500 company that seemed like a good bet for a full official bailout thanks to its state ownership, is struggling to make payments on its $2.05 billion of offshore debt. The plan now conceived by Tianjin, the municipal authority in northeast China that oversees it, is to put Tewoo in the hands of a little-known but powerful local asset manager modeled on the success of Singapore’s state investment firm Temasek Holdings. Tianjin State-owned Capital Investment and Management Co., the mastermind behind Tewoo’s debt revamp, is one of more than 100 asset managers set up across China in recent years. Read more