Beijing-The recent collapse of an-other Chinese investment-trust company, leaving angry U.S. and Japanese bondholders in its wake, highlights China's strategy of forcing write-offs of past financial problems even at the risk of tainting current investor sentiment. Unlike many of its highflying counterparts, Fujian International Trust & Investment was supposed to be different. It steered clear of the speculative property investments and loans to poorly run state companies that characterized other Chinese trusts and banks swollen with bad debts. Instead, the Fujian company opted for safer bets including stakes in utilities and airlines, and foreign investors extended it some $200 million in credit through Yankee and Samurai bonds (bonds issued by non-U.S. parties in dollars and non-Japanese parties in yen). But after it closed its doors in December, and missed a Samurai payment Jan. 24, Fujian Trust has been lumped with its debt-defaulting counterparts.
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