China Bailing Out Failing Trust Investments

China’s decision to prevent a default by one of the country’s high-yield trust investment products may have spurred concerns about its commitment to reforming its shadow banking system, but some analysts believe the moment simply wasn’t right.

“In theory, these products should be allowed to fail to send a warning,” Erwin Sanft, a managing director at Standard Chartered, told CNBC. “That’s unlikely at the moment.”

He noted that China faces an economic slowdown and restrictions on public sector financing as well as the need to deregulate interest rates and put a deposit insurance system in place.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu