China’s Trust Firms Pivot From Risky Debt After Crackdown
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As of June 2025, standardized assets such as stocks and bonds accounted for more than half of China’s fund trusts by value, according to industry data.
The change highlights a critical transformation in China’s multitrillion-dollar trust industry, once the core of the country’s shadow banking system. Driven by a regulatory crackdown on risk in the financial system, the industry is being forced to abandon its old, highly profitable model of funneling funds into non-standard debt for real estate projects and local governments in favor of becoming genuine asset managers that compete on performance.
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- By June 2025, standardized assets like stocks and bonds made up over 51.1% of China’s fund trusts, surpassing non-standard debt products.
- Total trust assets reached a record 32.4 trillion yuan ($4.6 trillion), rising over 20% from a year earlier, while real estate and infrastructure trusts dropped to 3.1% and 6.5% respectively.
- Regulatory reforms and industry shifts caused profits to fall, as firms pivot to lower-fee, competitive asset management and wealth management services.
- Kunlun Trust Co. Ltd.
- Kunlun Trust Co. Ltd. is a Chinese trust company mentioned in the article. Its Chairman, Wang Zhengrong, commented on the impact of the "Three-Part Classification" directive on the trust industry. Kunlun Trust is leveraging its parent company's industrial background to find a niche in the changing market.
- End of 2017：
- China's trust assets were over 26.2 trillion yuan.
- 2018：
- New sweeping asset management rules were rolled out, initiating contraction in trust industry assets.
- End of 2020：
- China's trust assets shrank to nearly 20.5 trillion yuan.
- 2023：
- Three-Part Classification directive divided the trust industry into three business types: asset management, asset services, and charity.
- 2023 and 2024：
- Revenue and profits of the trust industry started to move in different directions; profits decreased.
- 2024：
- Profits in the trust industry fell to just under 23.1 billion yuan.
- End of 2024：
- Wealth management trusts held just over 1 trillion yuan in assets.
- June 2024：
- China's trust assets were at least approximately 27 trillion yuan, since it was up more than 20% by June 2025.
- As of June 2025：
- Standardized assets (stocks and bonds) accounted for more than half of China’s fund trusts by value.
- Mid-2025：
- Real estate trusts fell to 3.1% of fund trusts by value; infrastructure trusts dropped to about 6.5%; securities investment trusts rose to nearly 51.1%.
- End of June 2025：
- Total trust assets hit a record 32.4 trillion yuan, up more than 20% from a year earlier.
- End of June 2025：
- Wealth management trusts reached nearly 4.4 trillion yuan in assets.
- Late 2025：
- A draft of the Measures for the Administration of Asset Management Trusts was circulated, aiming to prevent a return to old business models.
- CX Weekly Magazine
Mar. 20, 2026, Issue 10
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