The first four months of 2014 saw a rash of news stories detailing near-defaults in
a range of Chinese financial products, particularly among trust companies. Our thoughts on the issue can be summed up succinctly: Get used to it. We expect to see an increase in the occurrence of such incidents throughout the rest of this year and the next. Over 20 trust products have failed to pay out on time since the beginning of 2012. This note briefly outlines the trust industry, recent developments within it, and tells you What to Watch for in this space as events unfold.