Chinese Retail Investors Raise Concerns Over Zhongrong’s Payment Crisis

Chinese retail investors are expressing concerns about the exposure of listed companies to Zhongrong International Trust Co, following missed payments by the trust company. More than 100 questions have been submitted to Shanghai- and Shenzhen-listed companies, asking whether they have bought Zhongrong’s products. This growing list of queries suggests that Zhongrong’s liquidity crunch could trigger broader fears and contagion in China’s financial system, which is already under pressure from the country’s slowing economy. Zhongrong managed assets worth CNY 785.7bn ($107.69bn) at the end of 2022, with CNY 629.3bn linked to trust products. The missed payments by Zhongrong have added to stress in the financial sector due to China’s worsening property crisis.

How are Chinese retail investors responding to concerns over Zhongrong International Trust Co’s missed payments and its potential impact on listed companies?

Concerns Rise among Chinese Retail Investors Over Exposure to Zhongrong International Trust Co

Chinese retail investors are growing increasingly worried about the potential impact of missed payments by Zhongrong International Trust Co on listed companies. The market has been flooded with over 100 questions directed at Shanghai and Shenzhen-listed firms, aiming to uncover whether they have invested in Zhongrong’s products. This surge of inquiries signifies a rising anxiety that Zhongrong’s liquidity crunch may trigger broader fears and contagion in China’s financial system, already burdened by the nation’s decelerating economy.

As of the end of 2022, Zhongrong oversaw assets valued at CNY 785.7bn ($107.69bn), with trust products accounting for CNY 629.3bn of that total. The trust company’s missed payments have exacerbated stress across the financial sector, amplifying concerns stemming from China’s worsening property crisis.