China’s Zhongrong Trust Misses Payments: Is it China’s Lehman Moment?

Concerns are rising about a potential financial crisis in China as a major Chinese investment trust, Zhongrong Trust, has missed payments to corporate investors. This has sparked a rare protest outside their office in Beijing and added to worries about the slump in China’s property market. Zhongrong Trust is part of the “shadow banking” industry in China, which provides high levels of return to investors but operates outside the formal banking system. The missed payments, which total over $15 million, have raised fears of contagion spreading to the country’s investment trust industry.