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The failure of a major trust program to repay investors at maturity on Wednesday has alerted the sector to default risks after years of feverish "gold rush."
Jilin Province Trust, which raised 972.7 million yuan (US$159.5 million) to invest in Shanxi Liansheng Group, informed its clients that it had no repayment timetable as the debtor itself is mired in debt.
Shanxi Liansheng Group, one of the biggest private miners in coal-rich Shanxi province, owes over five billion yuan to six trust companies.
In January, another major trustee, China Credit Trust, just managed to repay three billion yuan (US$493 million) of principals invested in another Shanxi-based coal miner. But the interest has yet to be paid.
19 Feb 2014, Rmb109mn borrowed by Liansheng & arranged by Jilin Trust
Details: This Rmb109mn tranche is part of a six-tranche trust product worth a total of Rmb973mn arranged by Jilin Trust for Liansheng, a Shanxi coal miner. The other five tranches have matured since 2H 2013 and remain overdue.
Potential outcome: Repayment may be extended.
Complete List Of Upcoming Trust Defaults
Source: Business Insider
China just executed real estate developer Zeng Chengjie.
About 4,000 people are executed annually in the country, according to human rights organization Dui Hua. And a number of those executed are white collar criminals.
The Communist Party of China (CPC) has picked up its fight against corruption after a Lunar New Year lull by announcing probes of another two vice-ministerial-level officials.
On Tuesday evening and Wednesday morning, the Central Commission for Discipline and Inspection (CCDI), the CPC's anti-graft body, publicized on its website that Ji Wenlin, vice governor of south China's Hainan province, and Zhu Zuoli, senior political advisor of northwestern China's Shaanxi province, were under investigation for "serious violations of discipline and laws."
The two officials were removed from their posts on Thursday.
By allowing her people to experience a free market system, and partially allowing that system to take hold, I doubt the Chinese government is going to be able to keep control. I think the more China tries to pull it back, the more people that are going to be pissed about it.
When the whole International house of cards collapses, as it will, the Government of China will say to the people, 'See what happens when you play with the evil West, now we will return to the good old days of Government control!' And the people will say, 'Yes, we see the error of our way.'