The Current Problems In China's Trust Industry And To Develop Countermeasures

Trust is such an action that client consigns his property to a trustee on the basis of trust and the trustee manages and deals the property in the interest of beneficiary or specific purpose according to the client's will with trustee's name. Trust derived from England. Because of its special system function, it was introduced into other countries and developed rapidly so that it has became a indispensable part in capital market and a lever for the development of modern market economy. According to statistics, there are nearly 70 percent of assets held by the operators of trust industry in western countries. However, China's trust industry hasn't been on its properly developing orbit since its recovery from 1979, due to the limitation in the management of system and immature market. It has been neatened five times in short 20 years. Nowadays, with the improvement and development of China market economy, with the sharply increasing wealth and increasing diversification of property ownership system, with the issue of the relevant laws, China's trust industry faces a great opportunity. How should we seize the chance to fully exert the specific advantage of trust and make it become a financial institution as important as banking and insurance and an indispensable part of capital market? This is the purpose of this essay. In this article, the author analyzed the current situation of China' trust industry and gives the corresponding countermeasure.There are three chapters. In chapter one, the basic knowledge about trust is introduced, such as the definition, characteristics, function and trust origin. In the next chapter, the author presents the development history of China trust development course since its recovery from 1979 and points out current problems it encounters. Then the author analyzes the current problems, which restrict the development and need to be resolved quickly.The author presents the countermeasures to the above-mentioned problems respectively from the improvement of external surroundings and internal governance in chapter three. Good external surroundings should be provided and appropriate supervision system for trust industry should be set up. It is necessary to promote trust industry broadening its business space and ensure that trust industry regains its main business: financing for clients. This is the pre-requisite condition of trust prosperity. With favorable external developing environment, in order to occupy advantaged position in keen market competition, trust investment company should take essential measures on operating system and development strategy, such as strengthen operation and management and improve internal control system. At present, trust industry should take full advantage of agility and adaptability of trust to actively innovate new business and cultivate core competitive capacity. In the future in order to further profit, finance holding company should be set up on the basis of trust investment company by recombining and peeling off assets.