China to help Huarong clean up its balance sheet

As mentioned here last week, China will never allow for a state-owned firm such as Huarong's stature to collapse and this is further evidence of that. It is said that the PBOC would assume more than $15 billion of assets from Huarong to help the firm clean up its balance sheet and refocus on managing distressed debt, according to Bloomberg sources.

Recent public remarks by Chinese authorities have already helped to soothe local markets and this latest report will only bolster confidence and mitigate credit risk fears.