**China’s Zhongzhi Enterprise Group Declares Bankruptcy**
In a shocking turn of events, China’s Zhongzhi Enterprise Group has officially declared bankruptcy due to debts of up to 460 billion yuan. This represents the largest corporate bankruptcy case in recent years in China, according to a comprehensive report by our reporter Li Hui on January 7, 2024.
The group, headquartered in Beijing and founded in 1995, has more than 1,500 companies under its umbrella, including four major wealth companies that have experienced thunderstorms due to insolvency and inability to repay debts. Zhongzhi’s main businesses span various industries, including asset management, financial services, wealth management, and more.
Ripple effects are expected as hundreds of thousands of investors stand to lose money. Zhongrong International, a subsidiary, had approximately US$108 billion in assets under management, giving rise to deep concerns in financial circles about a potential financial tsunami in China’s economic system.
Zhongzhi’s financial troubles stem from a risky business model that involved high-interest wealth management and trusts, coupled with control over listed companies and investments in real estate and urban investment bonds. Their assets controlled, held shares, and managed through subsidiaries reached a staggering 3.6 trillion yuan, even surpassing that of Evergrande Group, China’s largest private real estate company.
The fallout from Zhongzhi’s bankruptcy is expected to have a profound impact on China’s real estate and trade markets, already under pressure from weak domestic demand. As the ripple effects of the real estate debt crisis spread, private investment confidence is likely to take a hit.
Voice of Hope invites everyone to work together to convey the truth and inject hope into China during this challenging time. As this situation continues to unfold, it is essential to keep the public informed and aware of the realities on the ground.