How were Chinese trusts reformed

In 2000, the central bank, the People’s Bank of China, withdrew the certification of all Chinese trusts and ordered them to resubmit applications in order to be certified.  Under the new regulations put in place, trusts were no longer allowed to borrow from outside of China, guarantee minimum returns to their investors, or take deposits.  This spurred a further boom-and-bust cycle, with more reforms coming in 2004 that required more oversight, transparency, and detailed annual reports on financial performance.  Further regulations in 2007 sought to both open and restructure the trust sector, allowing it to compete for high net worth individuals and institutions by limiting who can invest in a trust product, and by requiring more risk management and corporate governance.

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