Failure of major trust fund: CHINA

I Posted a speculative thread about China's possible default www.abovetopsecret.com... back in January; The post was generated due to a Forbes article www.forbes.com...
Looks like things are happening after all

www.wantchinatimes.com...

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.

reply to post by 727Sky


They have eleven more potential major defaults coming in right behind this one as well. From what I've read though about this one (and most of the others) is they are working on a restructured and deferred payment plans.

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

That'll require a lot of bullets under the Chinese system of justice and dealing with cases of high corruption or large scale fraud. I don't think they've ever heard of the US version of Club Fed for White Collar criminals.

reply to post by Wrabbit2000


I see this a lot differently.

China plays the long term game.

A while ago, China relaxed some of its controls and let free market / investment markets get a hold. The people basically wanted to get rich. This allowed overseas investors to pour money in. All good.

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.'

The investment companies will go broke, the Government will buy all of the defaulting infrastructure at cents in the dollar and some greedy Chinese businessmen without the correct connections will die from high speed lead poisoning or being ripped apart from angry mobs.

All good news for the Chinese Government and they can rule without interference for another generation or two.

P

reply to post by pheonix358


That's a pretty good theory as well.

My theory is China doesn't care about the Yuan because its building a war front.

My other theory is that our currencies are meant to fail as we build a New World Order.

America collapse into the Amero, then China and so on and so forth.

However China may play the long term 3-D Chess side of things, people like this, once publicly exposed to be examples? Won't fare well. We pamper our white collar criminals by comparison....and I'm more with China on this particular issue.

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.

Source: Business Insider

I'd just happen to be researching this on another issue recently for it to be fresh in my mind.

reply to post by Wrabbit2000


www.wantchinatimes.com...

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.

When removed I wonder if they still get paid?

Anyone else think its coincidence that China seems to be doing the same thing N. Korea is doing in terms of corruption probes?

As for China, they have their own scheme going on and I think Phoenix358 is on the money with some twists.

A foreign business must pair up with a Chinese business in order to do business in China. What we have been seeing is the foreign business, once established with infrastructure in place, being placed into a position of being unable to operate at a profit, forcing the foreign business to essentially shut down operations and leave. This leaves the infrastructure in place for the Chinese half of the venture to just take over and move forward, without the need to split anything with the foreign company.

This is one of the major issues when it comes to industrial espionage in china. The Chinese company moves forward with making items that were not invented by them, selling it on the markets cheaper than the western business ever could, undermining pretty much everything related to the rightful owner / investor / creator.

China has been caught cooking the books by the UN to the tune of almost 1 trillion dollars. When China was reporting its cash flow they conveniently left out municipal liabilities, creating a picture of sound fiscal policy when it was anything but.

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.

China has ha a lot of internal issues (protests / anger at government corruption / etc) that China is desperately trying to keep a lid on. I think its only a matter of time before the current Chinese government goes the way of the former Soviet Union.

reply to post by Xcathdra

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.

Respectfully, I disagree.

This is all long term strategy. When the system falls, the greedy Chinese who wanted to follow the evil capitalists will get the blame for China's almost total collapse. These people are still very much in the minority. The majority still have the attitude of hard work pays off and they will turn on their Capitalist brethren with a vengeance.

This is all planned and has been for decades.

Acting like the good parent, the Government will come out smelling like a rose.

Capitalism is based on a false premise and is in fact a house of cards. It will collapse and China is very much prepared for this to happen.

China may be cooking the books, but she is just playing the game. The US is not cooking the books, they are burning them!

P

China shows us that greed is a very powerful thing, in a country where you can be executed for being corrupt and stealing people still do it. And here in the good old USA you just get sent to camp with a fence around it to hang out with other crooked bastards.

china is like everywhere else filled with homes no one can afford the average wage is $4000 and the homes are $100.000 plus but they will have a country that is 21 century and the pace that they built it was amazing .

the west owes china a fortune and think how many firms they bought over since 08

reply to post by Xcathdra


There is allot of truth in what you have said. I remember they did the same thing to the Russians a few years ago with a military project.. Russia set it up, licensed and tooled then China took over the operation and basically forgot to pay any fees and said they did not have to. Russia sulked but that was the end of it.

pheonix358
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.'

More likely we'll see massive upheaval on a scale that would make Tiananmen Square seem like a folk festival. Whether people are Chinese, Ukrainian or what have you, Once they get a taste they don't just simply disappear back into the woodwork and brainlessly comply.

An ever increasing % of China's population no longer have even the slightest memories of Mao's little red book of mindless devotion to the Almighty State. China's touted long term plans may be showing that although they are well thought out and executed may not be fluid or dynamic enough to deal with rapid changes in the Market place, Public opinion, National and International fears and concerns.

In any case this should be interesting to watch unfold, however the cards fall.

reply to post by SLAYER69


I really hope the base of the Chinese culture and historic desire for some stability and status quo takes over from seeing that or India (for that matter) drop into a lawless anarchy.

I think it's a real fine line between dropping into very short term anarchy of maybe hours or days to a forceful transition ...and losing that precious window of time to a longer and less directed anarchy like Somalia has fallen into.

You make an excellent point about the energy of people, once unleashed, and that's not necessarily a good thing either. Not unfocused or uncontrolled. It's scary to contemplate a break down of civil order (saw it in LA in 1992) in the U.S.. Quadruple our population in the same space ...and it's nightmarish like a bad movie. That'd be China if they ever lose hold of the tiger's tail. At least long enough to see a very tragic solution come for their population challenges, I'd fear.

I very much wish that they keep their political system over there ...but having said that, I do ultimately wish them well under the system they have. Change for it's own sake is highly overrated, I think ...and Russia spent the 90's suffering that lesson for the world to learn from, IMO.

reply to post by Wrabbit2000


Couple that with the fact that there is an ever increasing divide between a fairly large percentage of the population who are modern wealthier city dwellers and those still living more or less traditional lifestyles. This is rarely talked or thought about by many when discussing China.

I'm not talking Doom porn but rather a very real situation in which many leave out. The Chinese Government has done a wonderful job maintaining order in certain areas but in others troops have been called in with enough regularities over the past decade makes one wonder if this will ever be solved or is something to be monitored and could it possibly spread as inflation inevitably rears its ugly head. The Wealthier will be able to weather it better than those still living more or less the way they have for centuries with the added benefit of Cell phones etc.

reply to post by SLAYER69


I agree with your sentiments. What the Chinese Government is trying to do is to reduce the population levels. They are now at the point that this will occur. The population level has, or soon will, peak. After that, the numbers will decrease quickly. This is the long term goal. No other form of Government can achieve this.

IMHO the average Chinese person is still dedicated to the Nation. I think the greedy little bastards that have embraced greed will get the blame, the Government will see to that. On a very grand scale, a lesson is being given on the woes of Capitalism. The media is controlled by the Government and even right now, greed and corruption is in the news every day in China as high profile people are lined up and shot with regularity.

It is all part of the overall plan.

P