China facing a “Lehman Brothers moment”?

The international financial world does not seem to have learned much from the lessons of the 2008 crisis: a new “Lehman Brothers moment” could be upon us and see the Chinese company as a protagonist Zhongrong International Trust, According to an alert released today by Wall Street Journal and that matches those against the Chinese giants in real estate sector CCountry Garden Holdings And Evergrandewhich causes anxiety for them financial stability of the dragon as a whole and for cabout the consequences that instability in Beijing would have for the whole world.

Zhongrong sold Financial products that describe themselves as “esoteric”.so complex that it is almost always the case incomprehensible to those who buy them. At the end of last year, the equivalent of $108 billion is said to have been managed. Standard & Poor’s had given it a BB+ rating, i.e. “acceptable risk”. His customers are mainly real estate companies that need to finance their construction projects. Four properties sold by Zhongrong recently missed principal and interest payments totaling $14 million to three listed properties in China.

These payment defaults not only endanger Zhongrong itself, but also the company Parent financial conglomerate, Zhongzhi Enterprise Groupwhich owns several wealth management companies and cooperates with many wealthy companies and individuals in China: Some customers of the parent company have already written about it social networks that you have not received the advance payments. One and high net worth companies can invest in stocks, bonds, real estate projects and other assets.

“Zhongzhi is a black box. They don’t have regular disclosures, it’s a private company and some investors don’t know what kind of assets they’re investing in,” the US financial daily quoted Xiaoxi Zhang, an analyst at Hong Kong-based Gavekal Research. “The worry,” he continues, “is that.” a “Lehman moment” is emergingwould jeopardize the solvency of the Chinese financial system.”

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