CIC to Reportedly Merge With Trio of Bad Debt Managers

Plans are reportedly underway to merge three of China’s largest bad debt managers with the nation’s sovereign wealth fund CIC.

China plans to merge three bad debt managers – China Cinda Asset Management, China Orient Asset Management and China Great Wall Asset Management – with sovereign wealth fund China Investment Corp (CIC), according to a report by state media outlet «Xinhua» citing unnamed sources. The report was published on Sunday but was no longer accessible online as of Monday afternoon. 

China’s Ministry of Finance is the largest shareholder of the three bad debt managers.

AMCs

In 1999, China established four distressed asset managers – also known as asset management companies (AMC) – originally to handle bad debt from the nation's four largest state-owned banks. They would later extend their activities beyond their initial remit before also beginning to pose a risk to the financial system. 

The fourth AMC, Huarong, was not part of the merger. It was renamed China CITIC Financial Asset Management last week after being bailed out and taken over by state-owned CITIC Group in 2021. A fifth AMC called China Galaxy Asset Management was formed in 2020.