Economics

Huarong’s Fate May Rest With Xi Confidant Who Loathes Bailouts

China’s Vice Premier Liu He is seen playing a critical role
Liu is seeking to reshape financial landscape, discipline SOEs

WATCH: The fate of China Huarong Asset Management Co. may now rest with the country’s vice premier who is said to loathe bailouts. (Source: Bloomberg)

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By Tom Hancock

May 5, 2021 at 9:00 PM UTC

This article is for subscribers only.

The future of Huarong Asset Management Co., a troubled Chinese financial conglomerate, may be determined by a man who believes that allowing more state-owned companies to default is just what the country needs: Vice Premier Liu He.

While Huarong insists it’s healthy enough to repay its debts, markets have been pricing in the risk of default since the company missed a March 31 deadline to report 2020 earnings. Another portent: In January, Huarong’s former chairman, Lai Xiaomin, was executed on charges that he’d accumulated a fortune in bribes during his years at the helm.