China’s Shadow-Banking Giant Files For Bankruptcy

• China’s Shadow-Banking Giant Files For Bankruptcy
  by Tyler Durden, https://www.zerohedge.com/
  One of China’s “secretive” shadow-banking giants filed for bankruptcy on Friday due to its inability to repay tens of billions of dollars in debt, a warning sign contagion from the downturn in the real estate industry continues to spread and raises questions if the property crisis in the world’s second-largest economy will accelerate into the new year.
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  2023 has seen China’s Shadow Banking system mostly acting as a liquidity-suck (red bars) while corporate bond issuance has barely offset the withdrawals.
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  Zhongzhi Enterprise Group Co., also called “China’s Blackstone,” which once oversaw more than 1 trillion yuan ($140 billion) before the property crisis, filed an application for bankruptcy in Beijing’s First Intermediate People’s Court, according to Bloomberg. 
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  Zhongzhi wrote in a filing that it “obviously” could not repay its debts. A letter to shareholders in November explained its debts total 420 billion yuan to 460 billion yuan ($64.4 billion), compared with assets of 200 billion yuan.
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  On the Chinese social media platform WeChat, the Beijing court published a statement saying that Zhongzhi’s “assets are insufficient to pay off all debts, and it clearly lacks the ability to repay in full.”
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  Zhongzhi was once the most prominent firm in the country’s $3 trillion trust industry, which pools savings from wealthy households and corporate clients to make loans and invest in real estate, stocks, bonds, and commodities. The bank first came on our radar last August when it skipped payments on several investment products, sparking rare protests outside its buildings by angry investors.
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