FINANCE

Another Chinese Trust Firm Enters Bankruptcy Restructuring

Published: Dec. 1, 2025 7:10 p.m. GMT+8

00:00

00:00/00:00

Listen to this article 1x

Huaxin Trust Co. Ltd. Photo: VCG

Huaxin Trust Co. Ltd. has entered bankruptcy restructuring, becoming the third trust company to undergo court-led resolution since China’s Trust Law was enacted in 2001, following New China Trust Co. Ltd. and Sichuan Trust Co. Ltd.

Financial regulators approved Huaxin’s bankruptcy restructuring request in October, and a court accepted the case Friday, the company said.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.

Subscribe to both Caixin Global and The Wall Street Journal — for the price of one.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

Huaxin Trust entered bankruptcy restructuring, becoming the third Chinese trust company under court resolution since 2001.
Financial and governance failures, including concealed ownership and management collapse, led to delayed repayments on 27 products worth over 7 billion yuan.
Most individual investors accepted claims buyout offers; Huaxin’s approach follows Sichuan Trust’s state-backed rescue rather than New China Trust’s liquidation.

AI generated, for reference only

Who’s Who

Huaxin Trust Co. Ltd.: Huaxin Trust Co. Ltd. has entered bankruptcy restructuring, making it the third Chinese trust company to do so since 2001. Its troubles stem from its de facto controller, Liu Hui, who used concealed shareholding structures to back his companies with loan guarantees, leading to significant risks. Regulators greenlit the bankruptcy in October, with a court accepting the case. The company had previously been flagged as high-risk in 2019 and faced delayed repayments on numerous trust products.

New China Trust Co. Ltd.: New China Trust was one of three trust companies to undergo court-led resolution since China's Trust Law was enacted. Unlike Sichuan Trust, which underwent a state-backed rescue, New China Trust was liquidated after its restructuring efforts failed.

Sichuan Trust Co. Ltd.: Sichuan Trust Co. Ltd. (now Tianfu Trust) underwent a state-backed rescue and successfully completed its reorganization this year. It stands as an example of a trust company that went through a court-led resolution, similar to Huaxin Trust Co. Ltd.'s current situation.

Tianfu Trust: Tianfu Trust is the new name for Sichuan Trust. Sichuan Trust underwent a state-backed rescue model, completing its reorganization this year before being renamed.

AI generated, for reference only

What Happened When

2019：: Regulators deemed Huaxin a high-risk institution.

2020：: Regulators halted Huaxin’s 'fund pool' business.

By September 2020：: Huaxin had delayed repayments on 27 trust products totaling more than 7 billion yuan.

Early 2021：: Governance at Huaxin collapsed after then-Chairman Dong Yongcheng assaulted General Manager Wang Jin.

2025：: Sichuan Trust completed its reorganization and was later renamed Tianfu Trust.

By late September 2025：: 3,004 individual investors—95.5% of those eligible—had signed transfer agreements in the buyout of retail investors’ claims.