China’s trust firms are redirecting money into risky capital markets and off-exchange financial instruments like asset-backed securities in response to a clampdown last year on trust lending to risky real estate and industrial projects intended curb the dangers of the country’s shadow banking sector, Reuters reported, citing data from the China Trust Association. Analysis of the data shows that total trust assets were RMB14 trillion (US$2.244 trillion) at year’s end. While outstanding loans grew only 8% last year (far below 62% in 2013), growth in obscure asset categories including “tradable financial assets” and “saleable fixed-term investments” was 77% and 47%, respectively.
China Economic Review