The mainland's first trust law, adopted by the country's top legislature in April, took effect yesterday.
The law, covering basic principles relating to trustees, will lead to a series of changes in China's trust businesses, China Daily quoted specialists in Beijing as saying. The central bank, the People's Bank of China, on Saturday said it would amend some items of the rules on trust companies according to the new law, the paper reported, without giving details.
Trust companies returned to China about 20 years ago when the country adopted the economic reform and opening-up policy. However, the absence of legal rules or guidelines for the trust business created problems. The mainland has had as many as 1,000 trust companies at a time, but only 239 existed in 1999 when the central bank launched a restructuring in the industry. Insiders said the number would be fewer now.
The law will provide legal support for domestic trust companies when they develop new trust businesses with foreign counterparts, said Yao Haixing, general manager of China International Trust & Investment Corp Development. Competition in the financial market would be sharper after China entered the World Trade Organisation, so companies and the legal framework had to be globally accepted, she added.
The present trust law makes no mention of practices of trust companies. Ms Yao believed such stipulations would be added as soon as possible.