China has imposed a 25 percent tariff on U.S. soybeans. File Photo by Craig Lassig/EPA-EFE

July 25 (UPI) -- Chinese businesses that import soybeans could be in trouble, following the imposition of a 25 percent tariff on U.S. soybeans by the Chinese government.

Chinese news site Guancha reported Thursday the Chenxi Group has submitted a "financial notice" to a regional court in Shandong Province declaring insolvency.


Chenxi, a company founded in Rizhao City in Shandong, is facing difficulties repaying its long-term debts.

The firm manufactures cooking oil, and relies on U.S. soybeans for production.

The firm's declaration of bankruptcy comes at a time when Chinese policy is discouraging business loans in order to curtail financial risk in the world's second-largest economy.

Chenxi is a conglomerate specializing in the production of edible oils, petrochemicals, trade and tourism.

In 2016, its sales exceeded $6.4 billion, and 60 percent of its revenue is from trade. At one point it was also China's largest importer of soybeans.

Chenxi's chairman Shao Zhongyi is believed to have a net worth of $1.9 billion. Chenxi is China's 26th-largest conglomerate.

Bloomberg reported China headed toward a "record" year of corporate-bond defaults.

Chinese companies have reneged on about $2.5 billion of public bond payments, according to the report.

"Corporate profits have worsened this year and are unlikely to improve against the backdrop of an economic slowdown," said Li Shi, general manager of the rating and bond-research department at China Chengxin International Credit Rating Co.