CHINA’S trust assets rose almost 8 percent in the first quarter to set a new record, signaling that a government crackdown on shadow banking and a rise in defaults haven’t curbed demand for the high-yield investments.

    The nation’s 68 trust firms ended March with 11.7 trillion yuan (US$1.9 trillion) after attracting 820 billion yuan in assets, or the most in four quarters, industry group China Trustee Association said yesterday.

    The average yield of the trust products fell to 6.44 percent in the quarter from 6.62 percent a year earlier.

    The expansion undermines authorities’ efforts to curtail credit growth, especially outside the banking system, as Premier Li Keqiang grapples with risks from shadow banking amid an economic slowdown.

    China’s banking regulator this month stepped up supervision of the trust industry by tightening the approval process on the firms’ entry into new businesses and products. Owners of the trust companies were also ordered to prepare to provide funding or sell their stakes when they face liquidity constraints. (SD-Agencies)