China Huarong Showdown Reveals Beijing’s Tougher Stance on Risk
- Central government has been quiet on debt-manager’s future
- State Council issues statement on failing state-backed firms
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Market turmoil surrounding China Huarong Asset Management Co. intensified on Wednesday as investors interpreted government silence on the embattled firm as a lack of official support.
The Communist Party has yet to comment on the distressed-debt manager, which is controlled by the finance ministry, even as concern about a potential restructuring sent its dollar bonds plunging to distressed levels. China’s State Council, the country’s top administrative body, instead reinforced the idea that struggling state-backed companies shouldn’t rely on government support.