A bankruptcy by a heavily indebted state enterprise backed by a provincial government, a large trust investment firm being unable to pay its investors and an order to all state firms in a southwestern province to restructure their debts are all recent incidents that have further highlighted the growing stress in China’s debt market.

Energy and mining conglomerate Qinghai Provincial Investment Group, which is ultimately owned by the state-owned asset watchdog for Qinghai province, had already defaulted on its offshore US dollar bonds in February before confirming in a statement on Monday that it had filed for bankruptcy.

Chinese magazine Caixin called the bankruptcy as a sign of “the collapse of blind faith in state-owned enterprise [for bond investors]”.

Last week, Sichuan Trust said it would be unable to repay investors, partly because the company had lost control over where the raised funds were invested. The final loss could reach billions of yuan, raising fresh concerns about the safety of institutions within China’s shadow banking industry that link retail investors with investment projects.