The state-owned enterprise under the Communist Party of China, China Aviation Trust, has been officially put under supervision and fined by the Chinese authorities for the suspension of a large-scale trust product, involving unpaid amounts reaching hundreds of billions of yuan, becoming the first large state-owned enterprise trust institution to enter the custody procedure since the implementation of the Trust Law.
Investors recently revealed that the explosion of China Aviation Trust Company Limited (referred to as “China Aviation Trust”) involved tens of thousands of investors. They are dissatisfied with the behind-the-scenes operations and have been reporting to regulatory authorities one after another recently. They have accused China Aviation Industry Group of implementing large-scale priority payments to internal employees through platforms such as “Whale Wallet” and “Money Cat” before the risk was exposed, with amounts reaching hundreds of billions of yuan.
Beijing institutional investor Zhou Hongwei (pseudonym) is one of the larger affected investors. He has invested over 47 million yuan in China Aviation Trust products both personally and on behalf of his company.
On January 15, Zhou Hongwei revealed in an interview with Da Ji Yuan, “Recently, a large number of China Aviation Trust investors have been seeking justice at the company’s headquarters in Nanchang. The national victims number in the tens of thousands, with amounts totaling hundreds of billions of yuan.”
Zhou Hongwei stated that it wasn’t until the end of 2024 when liquidity suddenly tightened that investors realized the severity of the problem. “The risk didn’t appear suddenly but had been concealed for a long time.”
Recently, the Beijing Business Daily reported that the Jiangxi Regulatory Bureau of the China Banking and Insurance Regulatory Commission fined China Aviation Trust 300,000 yuan for providing financing to projects that did not meet regulatory requirements and held responsible several individuals.
Regulatory information shows that since 2018, China Aviation Trust has been repeatedly penalized for fund violations in real estate investment, mismanagement in post-loan management, and damage to trust assets.
Previously, on April 18, 2025, China Aviation Trust was officially placed under supervision, with China Construction Bank Trust and Guotai Junan Trust taking over, becoming the first large state-owned enterprise trust company to enter the supervision process in the country.
China Aviation Trust is deeply involved in financing projects of Chinese real estate enterprises. The company’s financial data shows a continuous decline in business performance since 2021, with a net profit of 83.8671 million yuan in 2023, a nearly 90% year-on-year decrease. As of now, the 2024 annual report has not been disclosed.
Recently, investors provided two documents to Da Ji Yuan: a “Report Letter on China Aviation Industry’s Malicious Transfer of Whale Wallet-involved Company Equity, Evasion of Information Disclosure, and Illegal Acts of Whale Wallet” and a “Public Letter from the Trustor of China Aviation Trust, Demanding Legal Compensation.” These documents detailed the operational mode of the “Whale Wallet” product and its relationship with China Aviation Trust.
According to the reports, these investors accused China Aviation Industry Group of providing long-term, low-threshold, high liquidity, rigid payout financial products to group employees through internal platforms like “Whale Wallet” and “Money Cat.”
The reporting materials showed that the operating entities related to “Whale Wallet” and China Aviation Trust had significant overlaps in personnel, office locations, and fund transfers, with multiple China Aviation Trust executives holding concurrent positions in relevant companies. Statistics show that the platform has accumulated internal payouts exceeding 50 billion yuan over the past nine years.
Investors further alleged that before the full suspension of China Aviation Trust products in early 2025, around 30 billion yuan had already been concentratedly prepaid through the above platforms in the second half of 2024, primarily to internal employees of China Aviation Industry system.
Zhou Hongwei mentioned that this differential arrangement has caused strong dissatisfaction among investors. “External investors require a threshold of 3 million yuan to participate in the trust, while internal employees can enter with only tens of thousands of yuan and exit before the risk is exposed. This structural unfairness is evident.”
He pointed out that if the related funds are from China Aviation Trust or public fundraising, it is necessary to investigate whether it constitutes a transfer of benefits or unfair trades according to the law. “They use our money to first take off the risks of internal people,” which is the core issue we repeatedly highlighted in our reports.
Shanghai investor Chen Lanying (pseudonym) has invested 3 million yuan into China Aviation Trust, primarily sourced from compensation for family relocation.
Regarding the issue of preferential payouts on internal platforms, on January 15, Chen Lanying told Da Ji Yuan that she gradually learned about the situation after the suspension of the products. “We (ordinary investors) may have a default of six or seven hundred billion, but the official internal platforms have prepaid two or three hundred billion. This contrast is very hard to accept.”
She believes that the key issue lies not in the risk of the investment but in the fairness of risk-bearing. “If everyone bears the losses at the same time, it’s market risk. But if personnel related to the group leave early, and the remainder is left for ordinary people to cover, then the nature is completely different.”
Zhou Hongwei mentioned that their core consideration for investing in China Aviation Trust was the shareholders’ background of the company. “We mainly judged the risk based on the state-owned enterprise background; if it wasn’t a state-owned enterprise, we wouldn’t have invested at all.”
He recalled that during the product promotion process, sales personnel repeatedly emphasized labels like “military-industrial system,” “state-owned enterprise holdings,” and “group’s core financial platform,” which significantly weakened their risk assessment of underlying assets. “The logic at the time was simple – as long as it’s not a purely market-driven small institution, if there’s a problem with the state-owned enterprise, there would always be a solution.”
Chen Lanying also told Da Ji Yuan that the most crucial consideration in making investment decisions was not the rate of return but the institutional background. “China Aviation Trust gave the impression of a ‘very large state-owned enterprise in China,’ which made people feel secure.”
Due to the high investment threshold in trust products, Chen Lanying’s family concentrated funds from several relatives and friends to participate in investments through a single account. “Basically, all of the family’s retirement savings, children’s education funds, and medical emergency funds were put in.”
She recalled how sales personnel repeatedly emphasized the China Aviation Group background during communications and explicitly stated that the related products were “self-managed,” with group support provided in case of problems. “These statements were not contradicted by facts over the past years, which is also why many people continued to invest.”
Investors reflected that China Aviation Trust had long engaged in fund pool business, operating funds from different trust products co-mingled, maintaining liquidity through “short-lending long-investment” and cross-payment methods. In 2017, regulatory authorities penalized them for failing to strictly implement fund pool clearing policies.
After the concentrated explosions in the Chinese real estate projects, the aforementioned operation model became unsustainable, ultimately leading to a systemic liquidity crisis.
During the rights protection process, investors faced multiple practical obstacles. Zhou Hongwei stated that when attempting to report the issues offline to the authorities in Beijing, Shanghai, and other places, they were repeatedly restricted from action on the grounds of “crowding.” “Sometimes five or more people would be asked to leave.”
Chen Lanying described that she and other investors were once escorted away from the site when they went to report the situation to relevant departments. “Some were administratively detained, some were repeatedly interrogated; the cost of rights protection is very high.”
Meanwhile, several high-ranking executives within the China Aviation Industry Group have already been investigated for serious disciplinary and illegal issues, further intensifying investors’ concerns about internal governance problems.
In response to China Aviation Trust’s proposal of “waiting for asset recovery before devising payout plans,” many investors expressed opposition in a public letter. They believe that under severe suspicions of fund pool operations and unfair trades, it is not appropriate to simply apply the principle of “buyer beware.”
Zhou Hongwei pointed out that according to the new Company Law and Trust Law implemented in 2024, the premise of investor protection is that the “seller fulfills their responsibilities.” “If investigations confirm illegal operations, responsibility cannot be completely shifted to investors.”
Chen Lanying stated that the most critical demand currently is a thorough investigation of the fund flow of the internal platforms, the retrieval of pre-paid funds, and the restoration of a fair payout order based on this. “We’re not asking for special treatment but for consistent rules.”
Interviewees expressed that the impact of this incident has exceeded individual losses. “This not only concerns the asset security of tens of thousands of investors and their families but also the credibility of state-owned enterprises and the government’s credit system.”
Public information shows that China Aviation Trust was jointly established by China Aviation Industry Group Co., Ltd., and Huaxia Bank, managing assets exceeding trillions of yuan.
China Aviation Investment Holding Co., Ltd. holds 84.42% of China Aviation Trust, and Huaxia Bank holds 15.58%. China Aviation Investment is a subsidiary of China Aviation Industry Group, which is a subsidiary held by China Aviation Industry Group, a centrally managed state-owned large-scale military-industrial enterprise.
Therefore, China Aviation Trust is not only a third-tier subsidiary of a state-owned enterprise but also a trust company with a combination of listed backgrounds, Sino-foreign joint ventures, and military-industrial concepts.
In recent years, the downturn in the Chinese real estate industry has led to frequent defaults in real estate trust products where China Aviation Trust has major holdings. According to mainland media quoting industry insiders, China Aviation Trust has deeply participated in financing projects of real estate enterprises like Evergrande, Sunac, and Red Star Macalline, directly leading to the inability to settle some trust products on time.