Ayear ago this week, the mainland's central bank ordered the closure of Guangdong International Trust & Investment Corp (Gitic), one of the country's oldest and most successful government fund-raising 'window companies'.
That event - and the company's court-declared bankruptcy in January - sent shockwaves through international financial markets that continue to be felt far beyond the company's inability to pay liabilities of 38.77 billion yuan (about HK$36.18 billion), or the trust sector's marginal importance to the mainland's banking system.
By not moving to bail out or honour the provincial company's debts, the central government obliterated widely-held assumptions about what constituted mainland sovereign debt and the protections available to foreign institutions making state-registered loans to quasi-government financial institutions.
Implicit policy no longer outweighs explicit regulation.
Credit-tightening by overseas banks - a process that started at the onset of the regional financial crisis - increased, exacerbating liquidity problems at a number of mainland enterprises, particularly other mainland window companies.
Meanwhile, the much-vaunted promise of the People's Bank of China (PBOC) to clean-up the country's trust and investment companies, which numbered 239 and held assets of about 600 billion yuan at the start of the year, or 5 per cent of total banking system assets, has yet to materialise.
