Trust assets on the mainland expanded at the slowest pace in two years as the government cracks down on shadow banking and investors reassess the risks of the high-yield investments. Trust companies' assets under management climbed 6.4 per cent to 12.5 trillion yuan (HK$15.7 trillion) as of June 30 from three months earlier, the China Trustee Association said. That is the slowest growth since the first quarter of 2012 and compares with an average annual gain of 50 per cent since 2008. Premier Li Keqiang is grappling with sustaining economic growth and containing risks to the financial system after shadow-banking assets jumped more than 30 per cent in 2013 to 38.8 trillion yuan, according to Barclays estimates. While the expansion of trusts has slowed on tighter regulation, surging sales of wealth-management products signal that shadow banking is yet to be tamed. The average yield of trust products rose to 6.87 per cent in the second quarter from 6.44 per cent three months earlier, the trustee association said. The quarterly increase in assets under management was 751 billion yuan. The country averted its first trust default in January as investors in a three billion yuan high-yield product issued by China Credit Trust were bailed out days before it matured. The company last month delayed payments on a second product. The banking regulator tightened rules for new trust products in April as borrowers from coal miners to developers struggled to make repayments. Li wants to aid companies and economic growth by boosting bank loans and limiting more expensive shadow financing so that firms have lower borrowing costs. The "day of reckoning" is approaching for the trust industry, with repayments peaking at 2.12 trillion yuan this quarter, Haitong International Securities economist Hu Yifan wrote in a report. About half of outstanding trust assets were with industrial and commercial companies and infrastructure projects, while 11 per cent were in the real estate sector, according to the association. As property risks increase, trusts may become more cautious in directing money to that industry, the association said. The association's report showed the 68 trust firms have net assets of only 275 billion yuan, suggesting a limited ability to shoulder any implicit guarantees for their products.