The Chinese insurance company Zhongrong International Trust Co., a subsidiary of Zhongrong Zhongzhi Enterprise Group Co., has begun preparations for liquidation due to insolvency. This is reported by foreign media.
In 2022, the company managed assets worth $108 billion, but at the end of 2023, Zhongrong defaulted on trusts worth 250 billion yuan ($35 billion), affecting the interests of more than 30 thousand private investors and 2 thousand institutions.
Zhongrong's bankruptcy demonstrates the growing difficulties in China's financial sector. At least 162 trust companies, most of which are linked to troubled mortgages, have defaulted since the beginning of 2024.
The Chinese government plans to eliminate the sector's risks by 2029 by introducing new regulations to restore trust and make the sector more predictable. The shadow banking system, which shrank to 49 trillion yuan in 2024, poses a threat not only to individual investors, but also to the Chinese economy as a whole, whose stability depends on the reliability of trust companies and their ability to fulfill their obligations.
Zhongrong is a Chinese insurance company. The headquarters is located in Shanghai (China).
