China’s top audit office reviews trust sector

The National Audit Office is conducting a review of the RMB20tr trust sector. The trust firms are being asked to report on their risky loans to developers and their plans to dispose of them. China's top audit office is expected to submit its conclusions to policymakers in Beijing, who may then decide on the future reforms of the sector. The move illustrates how concerned authorities are about contagion from the property sector destabilising the financial industry. According to industry data tracker Use Trust, trust firms have this year defaulted on about RMB58bn of investment products linked to property developers, which were sold to wealthy Chinese. The audit office previously led an examination of bank exposures to Jack Ma Yun's Ant Group.