On a messaging platform hosted by the Shanghai Stock Exchange where investors can put queries directly to companies, the focus this week has been on missed payments from a sprawling financial conglomerate.“Dear investor,” wrote chemical business Shanghai Chemspec in one of a dozen similarly worded reassurances from listed groups, “the company has not bought any wealth management products from Zhongrong or Zhongzhi.”
Zhongrong, partly owned by investment group Zhongzhi, is one of the biggest players in a $2.9tn shadow financing market, referred to as the trust industry. Doubts over its health have added to mounting concerns about the state of China’s economy, which is struggling to recover after the Covid-19 pandemic.
Two listed companies said last week Zhongrong had failed to repay trust products, which offer savers and companies higher returns than traditional banks. This followed weeks of speculation over separate missed payments to retail investors from Zhongzhi’s wealth management businesses, which also direct billions of renminbi into savings products.