China Debt Crisis Bombshell: "Secretive" Shadow Banking Giant Managing 1 Trillion Yuan Misses Multiple Payments

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by Tyler Durden
Monday, Aug 14, 2023 - 05:40 PM

No surprises here: those who have warned for the past 15 years that the relentless increase in China's debt to new record highs - now at ~300% of GDP - month after month and quarter after quarter would lead to catastrophic results, were of course right, and while Beijing has done a mostly admirable job of debt crisis "can-kicking" over the past decade, the countdown to D-day has begun.

Just a few days after we reported that China is facing a "bigger debt crisis than Evergrande" in less than 30 days now that the country's formerly largest property developer, Country Garden, has entered a grace period on two of its bonds, overnight we got the latest Chinese crisis bombshell: one of the country’s biggest private wealth managers missed payments on multiple shadow banking (i.e. high-yield investment) products, stoking fresh worries about contagion amid the deflationary pressures discussed last night and, of course, a tottering real estate sector, which as a reminder is the largest asset class on earth.