Abstract
This article develops a new framework for explaining how the Chinese trust industry has expanded in spite of significant uncertainties in the Chinese Trust Law regarding the location of ownership of trust property. The new framework utilizes a social capital perspective. In addition, this article analyzes whether the transitional era of the trust industry might make it desirable for China to clarify the location of the ownership of trust property. Focusing on how the social network of the Chinese trust industry affects the behavior of related actors, this article argues that the network between active participants of the Chinese current trust industry constitutes a dense network, but with the transformation of Chinese trust industry, it seems possible that the Chinese new middle class as potential new players in the trust market will dilute the network from the periphery, while the network between the primary players in the market might become even denser. This article concludes that the ambiguity of the Trust Law concerning the location of the ownership of the trust property might not—in the short term—hinder the growth of this market, however, the clarification of the Trust Law on this issue might be desirable in order to promote the capacity of the trust market to develop, i.e. to facilitate the growth on the demand side. The successful resolution of the tension between these two competing pressures will determine the long-term growth of trust industry in China.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.