Chinese Shadow Bank's Massive Debt Revealed: £30bn Shortfall and $64 Billion in Liabilities

Zhongzhi, a major Chinese asset and wealth management company in the shadow banking sector, has admitted a shortfall of nearly £30bn and warned investors of its "severe insolvency." The company attributed the crisis to the departure of senior executives, which led to "internal management running wild." Zhongzhi's troubles highlight concerns about contagion in China's economy, particularly in the property market, which has faced a liquidity crisis due to strict debt limits. While some analysts expect government intervention to prevent the spread of Zhongzhi's troubles, others believe a bailout is unlikely as the trust industry represents a small portion of the financial system and most of Zhongzhi's creditors are wealthy individual investors.