China’s $138 Billion Shadow Bank Spirals at Terrible Time for Xi
- Zhongzhi unit fails to make payments on investment products
- Shadow bank continued to invest in property as rivals cut back
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Founded in 1995 as a lumber business, Zhongzhi Enterprise Group Co. grew to become a financial conglomerate with more than 1 trillion yuan ($138 billion) under management. Now it risks becoming the latest Chinese financial giant to fail.
The under-the-radar group, often dubbed China’s Blackstone by local media, operates at the heart of China’s once high-flying shadow banking market, which regulators have sought to corral since 2017. The firm has now raised alarm bells across Chinese markets after affiliated firms missed payments on some investment products.