Changing Concepts of Ownership of Trust Property in the Transitional Era of China’s Trust Industry.

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. [ABSTRACT FROM AUTHOR]