China: after Evergrande, it is now the Zhongzhi group that worries

Two years ago, the financial world had its eyes on Evergrande, fearing that the fall of this Chinese property giant would contaminate the country's entire economy. Now, a new Chinese group is in turmoil. It is an ultra-leveraged asset manager. Beijing police have opened an investigation.

The Beijing office of Zhongrong International Trust Co., part-owned by Zhongzhi Enterprise Group, in August 2023. AFP - GREG BAKER

By: RFI Follow


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The investigation was opened in Beijing, where the group is based, and is believed to relate to alleged offences, not specified by police.

Zhongzhi, the name of the company, is little known to the general public. And yet, it is one of the most important players in the market. A large number of Chinese companies and wealthy individuals have entrusted him with their savings.

For decades, many developers have used asset management firms to finance their projects. But the real estate crisis caused by the collapse of Evergrande and a slowdown in the national economy have thrown these companies into turmoil.

This is the case of Zhongzhi, which now says it is insolvent. Its debt would amount to 60 billion euros, according to a letter sent to investors.

According to experts, the setbacks of the group and its subsidiary ZTR are likely to have far-reaching consequences for the financial system in China.

Read alsoEvergrande: concrete skeletons all over China

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