6. Current Trust Industry in China: A Dense Network

This Chapter analyzes the relevant empirical evidences, and justified the hypothesis addressed in Chap. 4. The first section of this chapter provides statistical evidences for the growth of Chinese trust industry, and also analyzes the business models that are currently taken by Chinese trust companies. Then, the functions of trusts in modern China, which also serve as the engine for the rapid growth of China’s trusts, are explained. Moreover, a social network perspective allows us to identify some other crucial factors for the development of China’s trust business. The current trust industry in China is deemed to base on a dense network, and the evidences are illustrated in this Chapter. Further, this Chapter employs the concepts of mutual trust and network effects to analyze the characteristic of this dense network. Mutual trust plays a substantial role in establishing a business contract between the service providers and consumers. A network effect is the effect that one user of a good or service has on the value of that product to other people. This Chapter suggests that these factors together contribute to the explanation of the booming of China’s trust business in spite of ambiguity of Chinese Trust Law on the location of ownership of trust property.