China Leaders Sought Quick Zhongzhi Resolution to Shield Markets
- Bankruptcy deemed most effective way in October, people say
- Case highlights urgency to handle risks as economy struggles
The building that houses the Zhongzhi Enterprise Group Co. headquarters in Beijing on Jan. 5.
Source: Bloomberg
Chinese leaders pushed for an unusually speedy resolution for Zhongzhi Enterprise Group Co. after the shadow banking giant collapsed, underscoring the government’s increased focus on containing financial risks as the economy struggles.
Top officials concluded in October that bankruptcy would be the most effective approach in limiting the impact on financial markets, less than three months after Zhongzhi and its units defaulted on dozens of wealth products sold to the public, people familiar with the situation said, asking not to be identified discussing internal matters. Authorities approved the bankruptcy in late December, they added, before a court disclosed it last week.