Research On The Development Of Trust Industry In China

Recently, with the issue of a series of new asset management policies by China Securities Regulatory Commission, China Insurance Regulatory Commission and other regulatory agencies, the era of big asset management has arrived. Numerous financial services sectors, e.g. commercial banks, brokerages’ asset management department, fund subsidiaries, insurances’ asset management department, private equity funds, etc., are carrying out asset management business or devoting more efforts in business development, under the philosophy of “with no name of trust, doing real Trust business". Their businesses in respect to marketing channel, product transfer and operating leverages demonstrated obvious advantages compared to the trust industry, however, suffered relatively loose regulation, the need for Transformation and Development of the trust industry is imperative.Transformation and Development means that, under the circumstances of the "New Normal" economic and the significantly-changed external environment in the industry, the trust industry should take the initiative to promote positive changes of their external institutional environment, based on its own characteristics, re-sort the traditional trust businesses, take advantages of trust system, follow the Internet Finance trends, and optimize open financial policies of Shanghai FTA. The trust industry should strive to expand, to innovate business models, to provide financial services which are wide-ranged, timely, effective and good-customer-experienced, to make the trust industry staying tight with changes in the financial market, to enhance industry competitiveness, to maintain and expand market share, to make its own contribution by the trust industry playing its due role in China’s economic restructuring and long-term development. "Transformation and Development" is inseparable from the trust industry vigorously spread the institutional environment, effective supervision, the dissemination of trust culture, and is even more inseparable from the trust industry’s restructuring and business transformation.This study focused on the transformation and development of the trust industry. It synthesized and compared different aspects of the current domestic and international macroeconomic and the era of big asset management, based on the theoretical foundation of trust at the beginning. Then the history overview showed the hardships of the development process in trust industry. Based on data collection, the status quo of the trust industry was analyzed, as well as the existing barriers in this process. Case studies of the trust industry’s transformation and development in the UK, United States and Japan were conducted and the results showed that they have a more mature trust industry and representative features. This paper aimed at providing useful recommendations for China’s trust industry transformation process at the present. It identified the problems and absorbed precious current practices of the trust industry’s transformation via comparative case studies. Under the context of the rise of Internet Finance, the set up of Shanghai FTA and other major financial market trends, this study put forward several workable suggestions and practical analysis on the transformation and development of the trust industry in the end.The results of the study can be concluded in three points. Firstly, the transformation and development of the trust industry need innovation of external institutional environment of and effective supervision. Secondly, in terms of organizational innovation, industry companies can try "financial holding" mode, followed by the trend of Financial Mixed. Third, trust industry should change the current situation where the investment and financing trust businesses play the most part, innovate business models actively, carrying out the transaction class trust business vigorously; Fourth, optimizing the Internet Finance to achieve self-marketing channel construction and enhance risk management capabilities; Fifth,integrating into the Shanghai FTA, making efforts to enhance the capacity of cross-border equity investment and to encourage the business cooperation with financial leasing industry, taking the initiative to make adaption to the new financial environment, maintaining the industry’s competition advantages, and helping the transformation of the industry.Combining the innovation of trust industry’s legal environment, effective supervision, innovation of industry organizations and trust services innovation, this paper demonstrated a comprehensive and multi-perspective thinking on the development of the trust industry during the transition from the macro, meso and micro level. this the meantime, based on the transformation of the trust industry, Internet Finance and institutional opportunities of the Shanghai FTA, certain level of innovation is made in respect to the research perspective and content.However, this paper has several limitations in quantitative analysis, e.g. building the models to make econometric analysis. Besides,due to the difficulty to collect data in the trust industry, the statistical coverage is not uniform, and it failed to build an appropriate model to conduct quantitative analysis. This paper, therefore, adopted comparative analysis, using historical analysis and induction & deduction. Industry data related to the trust industry still is waiting to be collected in a systematic way. The improvement is needed and may utilize the quantitative analysis model.