I forgot to mention perhaps the most important aspect of the rapid increase of money flowing into the trusts, the ponzi-like stability. It is of course no pure Ponzi, but most like most bubbles it incorporats more or less of it's logic. As long there are big gains money keeps flowing in so even if the trust is unable to earn enough in the short-term there is enough liquidity to pay out the investors. Given the staggering increase of roughly 50% in wealth managed only the dumbest, most arrogant or most unlucky trust managers could blow it recently. It is perhaps no suprise that the last big fund had seemingly concentrated all the loans regionally and in single sector, coal. In this case the severe difficulties within that industry hit the trust with full force.

Overall far more trust assets are chasing good enough returns to match the ~10% promise to the rich and influential clients. They roll over mostly under a year. As I said before it feels like a fuse snaking to a big bomb through the legs of chain smokers.

It is important to point out that a similar bubble happened back in the 2005-2007 in the Chinese stock market when everybody seemed to speculate there. Prices rose incredibly fast to incredibly heights only to come crashing down to deep lows. The memory of that crash has kept many out of that particular market which would be actually quite cheap if the earnings of the SOE would be sustainable. Now the smart money seems to be mostly in trusts aka WMP.

Nobody knows when the trust bubble will burst but if something can not go on forever it will end. Hopefully the Chinese manage to make the landing as softly as possible.