Demand For Trusts Set To Take Off In China

This article was first published in IFC Review, May 2012.

Trends Driving Demand

The spectacular economic growth going on in China has been accompanied by great changes to the Chinese financial services market in the last 30 years. When it comes to the development and use of trusts in the country, the sector's transformation though nascent, is expected to grow just as dramatically. However, a number of notable trends look set to drive considerable future demand for trust products, with the advent of 'overnight millionaires', who are predominantly first-generation, self-made entrepreneurs, likely to fuel much of the appetite on the mainland.

In many ways it is the speed of the wealth creation in China that will drive a move into trust products. In Hong Kong and Taiwan many of the self-made millionaires have set up family offices and trusts structures to ensure a smooth passing of the baton to their second and third generations. Similarly we are today seeing