China Trust Giant’s Collapse Leaves Wealthy Investors Reeling

More than a year after one of China’s biggest trust companies collapsed, hopes for a recovery in the $3.7 trillion industry are quickly fading.

Zhongrong International Trust Co., which managed about $108 billion in 2022 before the government stepped in the following year after steep losses on real estate and other investments, was recently deemed insolvent by state-appointed custodians who submitted a winding-up proposal to regulators, Bloomberg reported this week.

The assessment is the latest indication of protracted pain in a key segment of China’s shadow banking system — as well as confirmation of Beijing’s unwillingness to bail out ...