Commenting on the collapse of AVIC Trust, SMU Associate Professor of Finance Fu Fangjian said that placing AVIC Trust under custodianship is tantamount to “finding two helpers”. Assoc Prof Fu said that these helpers do not provide a full guarantee, and their role is only to assist in recovering assets from the relevant projects. He added that the outlook is probably not optimistic as to how much can be recovered. He said that the central authorities have yet to intervene because AVIC Trust’s defaults have not risen to the level of systemic risk. He said that the risks are manageable, and the central authorities would still want to spend money where it matters most.
