China ramping up shadow banking clampdown

Standard & Poor's is predicting continuation of a crackdown on shadow banking in China in 2021. The government has moved to take control of Sichuan Trust Co, which reportedly faces an estimated RMB20-30 billion of losses from its trust products under management . . .

HONG KONG -- China's move to take control of Sichuan Trust Co. Ltd. signals a growing assertiveness with the sector, according to global ratings agency Standard and Poor's. Chinese officials said the entity was plagued with governance issues, resulting in a swath of defaulted trust products, but S&P Global Ratings believes the authorities' action on Sichuan Trust demonstrates China's intention to continue its crackdown on trust entities specifically, and China's shadow bank sector generally, in 2021.