Recently, multiple financial wealth management products at the Zhejiang Financial Assets Trading Center (referred to as “Zhejin Center”) have faced overdue payments involving a fund size exceeding 20 billion yuan (RMB), affecting nearly ten thousand investors. What’s worth noting is the state-owned background of Zhejin Center and the fact that the defaulting company, Xiangyuan Holdings, with an AA+ credit rating, and a low yield rate of 4% on financial products, failed to avert this financial crisis. Some netizens described it as reaching new heights: seemingly foolproof investments ultimately ended in default.
According to a report by Caixin on Monday (December 8th), on December 6th, hundreds of investors visited Xiangyuan Holdings Group Ltd., the fund user of the defaulted products and also the guarantor of these products responsible for the current crisis, at Xiangyuan Building in Shaoxing. They did not receive any payment solutions on-site and the system displayed “temporary withdrawal not available.”
Currently, the Zhejin Center app’s page shows that the system is undergoing an upgrade, and the withdrawal function has been disabled.
Several investors reported that starting from November 27th, several long-running stable term products at Zhejin Center faced issues such as failure to pay upon maturity and inability to withdraw after crediting, involving several dozen products backed by Xiangyuan Group like “Jinduo Shaoxing,” “Lishui Mingfan,” “Shaoxing Chenjian,” and “Wanyu Changxing.” The total scale of these affected products is estimated to exceed 20 billion yuan, impacting nearly ten thousand investors.
A report by Economic Observer on Monday stated that a female investor, Ms. Zhu, mentioned that on December 3rd, she successfully sold a product in Zhejin Center’s resale area. However, she has not been able to withdraw the proceeds from this sale yet. The platform notification stated, “Executing clearing tasks currently, transactions like recharge, withdrawal, and purchases are not available.”
Many investors mentioned that the investment terms of the products they purchased ranged mostly from over 1 year to 2 years, with an expected annualized yield of 4.6% to 5%.
At the registration desk on the second floor of Zhejin Center, Interface News journalists saw multiple investors registering their identity information along with the amount that hasn’t been paid out or matured, ranging from hundreds of thousands to millions, with several investors having investments around 5 million yuan. One investor, Mr. Lu, had invested over 8 million yuan.
Blogger “Against the Light Prism” noted that this financial crisis was not coincidental but rather the inevitable result of a series of interlinked risk chains.
The first chain involves real estate downward spiral and new borrowing to repay old debts. Xiangyuan Holdings, though renowned for cultural tourism, primarily deals in real estate. With the decline in real estate sales leading to a significant drop in revenue, the cash flow is tight, forcing them to borrow to survive.
The second chain is about the platform’s halo masking risks. The national background of Zhejin Center, along with Xiangyuan Holdings’ cultural tourism giant image, created a low-risk illusion. Investors believed that the stable 4% to 5% yield was safe, overlooking the high concentration of these products’ underlying assets in Xiangyuan’s high-risk real estate projects.
The third chain is the exposure of risks due to qualification cancellation. At the end of 2024, Zhejin Center lost the qualification to issue new financial products, managing only existing assets. Many investors were unaware of the risks behind this change.
The fourth chain is the anticipated credit collapse of bills. Signs of Xiangyuan Holdings’ tightened cash flow were evident earlier. A notice by the Shanghai Bill Exchange on November 30th indicated continuous bill defaults in at least 10 related companies of Xiangyuan Holdings.
This financial crisis shattered two common misconceptions. Firstly, it debunked the notion that low returns equate to low risks, and secondly, it challenged the belief that a state-owned background guarantees a fail-safe repayment. Shareholders of the platform cannot be solely relied upon to back the products.
Blogger “Yang Xiaoqiang is Here” in a video mentioned that this crisis reached unprecedented levels. With a 4% yield rate lower than trusts and private placements, an investment threshold of 200,000 yuan, plus a validation requirement of 500,000 yuan, there should have been no reason for a default, yet this indeed left investors disappointed.
One investor told Caixin that the underlying assets of several defaulted products were self-packaged accounts receivables by affiliated companies of Xiangyuan, reshaping bad assets into recoverable debt.
Xiangyuan Holdings CEO Shen Baoshan, on December 5th at Zhejin Center, responding to investors’ queries, confirmed the above observations.
He stated, “Originally, real estate generated two to three hundred billion in sales annually, but now it’s stagnant. We invested in two projects in Fuyang, one in Yueyang, one in Hangzhou Bay from 2020 to 2024, totaling four projects. One project in Fuyang was abandoned.” He added, “Previously, we were scrambling to repay debts, now we have no funds.” Currently, they pin their hopes on the Shaoxing government’s capital injection to become a major shareholder, stabilizing company assets; otherwise, continuous devaluation looms.
Wealth Management Magazine reported on December 7th using the example of investors holding the “Lishui Zhuosheng” product. The trading institution listed is a Xiangyuan affiliated company, with credit enhancement by Xiangyuan Holdings and Yu Faxiang. The underlying asset is a 50 million yuan factoring financing receivable, with the debtor still being Yueyang Xiangyuan Industrial Co., Ltd., an enterprise within the Xiangyuan system.
This indicates that the entire product’s fund chain is highly concentrated within the Xiangyuan system, appearing to have credit enhancement but in reality is a “self-guarantee,” with risks not truly diversified.
It’s worth noting that the credit rating report issued by Hangzhou United Credit Rating Consultation Co., Ltd. on October 17, 2025, showed Xiangyuan Group’s credit rating as AA+, with a stable outlook and a validity period of one year. The company’s homepage proudly displayed the title “China’s Best Rating Agency 2024” with the United Credit rating.
The credit rating of the guarantor company is also a significant factor for investors when deciding on products to invest in. Several investors informed Interface News journalists that they usually look for an AA+ credit rating before selecting different projects.
Shen Baoshan further mentioned, “Our total assets are around 60 billion, including real estate, stocks, etc.; total liabilities over 40 billion, including bank loans, construction units, and investments by investors. The fluctuating assets of 60 billion are amidst falling stocks and property market.”
Tianyancha shows that from 2019 to 2023, there were changes in the ownership of Zhejin Center’s shares from state-owned to private-owned. Hangzhou Minzhi Investment Management Co., Ltd. holds 58.57% of Zhejin Center’s shares, with the remaining shares held by state-owned enterprises, including Ningbo City Construction Investment Group Co., Ltd.’s Ningbo Yongcheng Assets Management Co., Ltd.; Zhejiang Financial Market Investment Co., Ltd.; Hangzhou Golden Investment Enterprise Management Co., Ltd.; and Guoxin Capital Co., Ltd. (Shenzhen State-owned Assets Supervision and Administration Commission).
The equity structure of Zhejin Center from its establishment in October 2013 showed state-owned capital accounting for 70% and private capital accounting for 30%.
Caixin, through penetrating ownership structure, discovered the significant ties between the largest shareholder, Minzhi Investment, and Xiangyuan Holdings. Xiangyuan Holdings’ subsidiary, Anhui Yixiang Culture Tourism, holds a 55% stake in Hangzhou Weiyou Huaye Tourism Co., Ltd., while Minzhi Investment holds the remaining 45% stake of Weiyou Huaye.
After a change in major shareholders, the risk control and credit levels of Zhejiang Financial Asset Trading Center significantly declined, yet they dared to release products promising a return rate of over 5% annually, far exceeding the market average, with an entry threshold set at hundreds of thousands of yuan.
On October 31, 2024, the Zhejiang Provincial Local Financial Regulatory Bureau released an announcement clearly stating that Zhejin Center is no longer qualified for financial asset trading, but the company continues to bear the responsibility for disposing of existing businesses.
After losing its qualification, Zhejin Center was renamed Zhejiang Zhejin Asset Operations Co., Ltd. However, the website and WeChat account have not updated the name and still remain Zhejiang Financial Asset Trading Center.
According to business information, on January 13, 2025, when the company was renamed, Zhejin Center’s legal representative and chairperson cum general manager, Ding Jianlin, was replaced by Ding Jianlin. Several investors expressed confusion about whether this was a personal name change for Ding Jianlin or if a new chairperson, Ding Jianlin, was appointed.
Established in 1992, Xiangyuan Holdings is involved in real estate, cultural tourism, and infrastructure sectors with three listed companies – Xiangyuan Culture Tourism, Haichang Ocean Park, and Jiajian Shares. Over the last three trading days, their stock prices witnessed falls ranging from 10% to 30%.
More worrisome is that ten companies within the Xiangyuan system appeared on the Shanghai Bill Exchange’s “Continuous Overdue List,” with a total overdue balance of 37.375 million yuan. Some subsidiaries also face issues like tax debts, being listed as a person subject to enforcement, and restricted high consumption events – Anhui Xiangyuan Urban Renewal Co., Ltd., with a registered capital of 1.2 billion yuan, was labeled as a person subject to enforcement due to a dispute worth 65,000 yuan, reflecting the tight cash flow where crisis management is at a tipping point.