| Established in 1978 when the reform and opening up policy wasinitially lauched by the central government, China International Trust andInvestment Corporation, the first Trust and Investment company in PRC,has witnessed its over 20 years' development and experienced 5 large scalerestructurings toward the periodically disordered developing process. Thiskind of vicious circle resulted from external causes which included macroeconomy fluctuation and finance regime's evolution, as well as internalreasons which involved Chinese trust companies' lack of proper businessorientation.With the promulgation of PRC Trust law in 2001, which established anall-round framework of this specific sector, Chinese trust companies havestarted to take on the healthy and upward trend. A recent survey shows thatby the end of 2006, 59 trust companies had been approved to bere-registered and had acquired new licenses, with total assets amounting toRMB￥300 billion and total workforce exceeding 4 thousand. The total netprofit in 2006 was about RMB￥2 billion with the average figure for eachcompany amounting to RMB￥40 million which was obviously beyond theaverage profitability of security companies and fund managementcompanies.However, Chinese trust companies as a kind of independent financialinstitutions specializing in trust business have not formed a definitebusiness orientation strategy to be in line with its own features or to caterto the market's requirements. Consequently, the Trust Sector is confrontedwith a series of great challenges with regard to its sustainable development.Furthermore, it is increasingly important and very urgent for Chinese trustcompanies to formulate a proper business orientation which is suitable toboth our country's reality and development trends of the world trustindustry. Only when Chinese Trust Sector makes a proper orientation, it would reinforce its current status in national economy, cope with the greatchallenges brought up by the deregulation of global finance, globalizationof economy and finance, and finally enable itself to become one of the 4mainstays of our country's finance system.Focusing on the research topic—Trust Companies's BusinessOrientation, and based on finance, economics and management theory, thisdissertation employs a variety of research methodologies, includingsystematical analysis, empirical study, criterion study and comparativestudy.This paper can be divided into 4 parts. The first part, involving Chapter3 and chapter 4, examines the origin and evolution of trust industry, as wellas the intrinsic function of trust companies, and summarizes the mainfunctions and business of trust in those countries which trust sector iswell-developed. The second part, consisting of Chapter 5, by utilizing thetransition theory of institutional economics and the game theory, analyzesthe evolution of Chinese Trust Sector, and finds out the main reason for theunder-development of Chinese Trust Sector in the past 20 years, whichincludes unperfect regime and rules as well as improper businessorientation. Chapter 6 constitutes the third part. According to financefuction and orientation theory, this paper, by adopting the deducing route of"function—orientation", finally formulates a business orientation which isquiet suitable for Chinese trust companies. Chapter 7 makes the fourth part.This part analyzes in the first place general risks and business risks thattrust and investment companies might confront, and brings forward,pursuant to relevant risk management theory, a risk prevention system.
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