At the end of 2025, Henan Province’s Dengfeng City Construction Investment Group Co., Ltd. was listed as a dishonest person subject to execution by the court for failing to fulfill its guarantee responsibilities. According to records in the court’s enforcement system, the company was involved in a guarantee loan overdue case for the amount of 37.1187 million yuan. Currently, it has entered the judicial enforcement process. From the enforcement list, it can be seen that Dengfeng Construction Investment Group has accumulated multiple enforcement items, with the total amount involved nearing one billion yuan.
Journalists compared multiple corporate announcements, bond disclosure documents, and rating agency focus letters and noticed that since 2025, various local government investment platforms and local state-owned enterprises in mainland China have been successively subjected to enforcement or listed as dishonest persons subject to execution. Based on disclosed cases, at least 8 city investment companies have failed to fulfill their debt disputes, guarantee responsibilities, or financing arrangements in 2025, subsequently entering judicial enforcement proceedings, with some entities included in the list of dishonest persons subject to execution.
A long-time researcher on local financing platforms, an official from a state-owned enterprise in Lanzhou named Huo Yunhai (pseudonym), pointed out in an interview with Epoch Times that in the case of Dengfeng Construction Investment, the amount involved is not particularly outstanding, but “the problem is not the amount, but the nature of it.”
He told the reporter, “Once a city investment company is listed as dishonest, the issue will not be limited to just this amount of money. It’s not just about this over 30 million yuan issue today, but it will affect financing, credit, guarantees, project approvals, the entire chain will be impacted.” Some industry insiders also pointed out that the risk has already threatened banks.
Huo Yunhai stated that in recent years, financing conditions have significantly tightened, and local government investment platforms are particularly sensitive to the word “dishonesty”. “Once labeled with this tag, it is often beyond what one enterprise can bear on its own.” He added that in regions with greater fiscal pressures in northwest China, the interconnectedness among city investment platforms is high. “If one encounters problems, it is easily understood by the market as a regional issue, which is also the most concerning situation at the local level.”
It is reported that the current dishonesty issue stems from a bank loan guaranty provided by Dengfeng City Construction Investment Group Co., Ltd. to its subsidiary Dengfeng Power Plant Group Co., Ltd., which failed to repay on time. The lending bank is Huaxia Bank Co., Ltd., Zhengzhou Branch.
Wang Jie, an industry insider following the progress of this case, told reporters that after a renewal loan business at Dengfeng Power Plant Group became overdue at Huaxia Bank, the bank immediately applied for compulsory execution to the court, and the Zhengzhou City Zhongyuan District People’s Court subsequently accepted the case. As the guarantor, Dengfeng City Construction Investment Group was thus legally designated as a dishonest person subject to execution.
Ms. Zhang, in charge of the lending department at a branch of China Construction Bank familiar with bank credit practices, told the reporter that once the guaranty responsibilities enter the execution process, “The city investment is practically being formally pulled in,” and “regardless of whether the money is used by themselves, as long as the guaranty is in place, it is difficult to withdraw legally.”
She pointed out with an example from the Guangdong region that in some cities in the Pearl River Delta, if city investment platforms enter into execution procedures due to guaranty responsibilities, the bank internally often adjusts risk control and credit arrangements simultaneously. “Not only the involved platforms, but other platforms under the same regional control person may also be restricted or even suspend new business. She believes that once a dishonest record is established, the repair cycle typically lasts for years, and in the current environment, there is generally a low willingness for banks to re-lend.
Data compiled by several mainland Chinese media outlets show that Dengfeng City Construction Investment Group Co., Ltd. is a local state-owned city investment platform in Dengfeng. According to its 2025 interim report, the company had total assets of 21.867 billion yuan, total liabilities of 7.017 billion yuan, and net assets of approximately 14.85 billion yuan. Judicial records also indicate that Dengfeng Construction Investment has not been the first time involved in enforcement items, with some subsidiary companies’ shares frozen by the court, affecting the liquidity of related assets.
It has been reported that Dengfeng Power Plant Group and related entities are currently in negotiations with the applicant for execution and the court, and the related payments will be processed step by step in accordance with the negotiation progress, with the case still in the negotiation stage.
Further sorting through court enforcement notices, corporate disclosure documents, and media reports from various regions, it is found that since 2025, several city investment platforms and local state-owned enterprises in many places in mainland China have been reported to have entered judicial enforcement or listed as dishonest persons subject to execution.
Among them, Kunming City Construction Investment Development Co., Ltd. in Yunnan was listed as a dishonest person subject to execution in November 2025; in the same month, Tianjin Dongli Urban Infrastructure Investment Group Co., Ltd. was subject to execution by the court due to engineering settlement disputes, with an enforcement amount of 3.82418 million yuan. In August 2025, Lai’an City Investment Development Co., Ltd. in Shandong was listed as a dishonest person subject to execution, with an amount of around 11.0545 million yuan.
In western China, the main city construction investment entity in the Guiyang Economic Development Zone was disclosed to have entered an execution process by a rating agency in March 2025, with related promissory note dispute funds not fully repaid and subsequently listed as a dishonest person subject to execution. Kunming Airport Investment Development Group Co., Ltd. was also disclosed to have enforcement and dishonest execution records in February 2025. In the northwest region, Xi’an Fengdong Development Group Co., Ltd. disclosed multiple enforcement items in 2025, involving a total amount exceeding 300 million yuan, with some cases originating from joint guaranty responsibilities. Zaoyang City Urban Construction Investment Operation Co., Ltd. in Hubei was disclosed to have entered judicial enforcement procedures in December 2025, with an enforcement target of around 50.38 million yuan.
With the Chinese economy facing a near freefall, state-owned assets are undergoing the largest upheaval since the “reform and opening-up” era. Mainland central enterprises are going bankrupt or even closing down, while banks are facing a dilemma. Mr. Yang, a scholar close to the local state-owned asset system, stated in an interview that such situations are threatening normal bank operations: “For the authorities, the banking system is the most crucial part of state-owned assets, and they must ensure the financial security of banks at all costs. Companies like Vanke, burdened with debts, are no longer worth saving.”