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Alicia Dou recalls how the customer service officer at China Construction Bank repeatedly tried to sell her an investment product whenever she visited her local branch. After being pitched the idea more than ten times, the Beijing-based headhunter finally decided in July 2012 to buy the so-called wealth management product.

Dou invested 100,000 yuan ($16,500) in a “premium trust certificate” that yielded 12 percent annually, nearly four times the rate the bank pays on one-year term deposits. The certificate, which had a one-year maturity that could be rolled over, was issued through a trust by a group of mining companies from Shanxi, a province southwest of Beijing. Issuance of such trust certificates has soared in recent years, making this one of the fastest-growing areas of China’s so-called shadow banking system, which extends credit outside bank lending channels.

“I took a chance and gained handsomely,” says Dou. Despite the high return, she decided to cash out after one year. “I remember reading the fine print on the certificate: ‘The bank doesn’t guarantee the safety of this investment,’” Dou says. “I asked the teller about it, and she said, ‘Just ignore that: It’s standard contract language. I can tell you our bank will guarantee your money back plus the interest stated on the certificate.’ Though I enjoyed a 12 percent gain, I decided one-year [of] risk was all I was willing to take.”

Dou had reason to be cautious. China’s banks have sold trillions of yuan worth of similar wealth management products in recent years, and those investments are looking increasingly shaky. In January more than 700 investors — both wealthy individuals and institutions such as People’s Insurance Co. (Group) of China, the state-owned company that is the country’s largest property/casualty life insurer — were forced to take an effective write-down on a 3 trillion-yuan certificate, the Credit Equals Gold No. 1 product, after the issuer, mining operator Shanxi Zhengfu Energy Group, ran into financial trouble. Shanxi Zhengfu Energy began defaulting on bank loans and local-investor-backed credit lines last year. To prevent the company from defaulting on the trust certificate — which was issued by China Credit Trust Co., a leading trust company, and sold by Industrial and Commercial Bank of China, the country’s largest bank by assets — the authorities intervened and arranged a deal in which Shanxi Zhengfu Energy paid 2.8 percent interest for the third and final year rather than the product’s supposedly guaranteed 10 percent rate. It was not the first such write-down on a trust product, but it was the most prominent given that the investment had been sold by giant ICBC.