Core Viewpoint - The article emphasizes the strategic direction for the development of China's offshore financial system, aligning it with the Shanghai International Financial Center, highlighting its role in enhancing national financial competitiveness and supporting the internationalization of the Renminbi [1][22]. Summary by Relevant Sections Offshore Financial System - The offshore financial system is not merely a combination of "overseas accounts + foreign currency business," but a comprehensive institutional ecosystem that integrates five dimensions: financial, institutional, governance, spatial, and strategic [3][6]. Financial Dimension - This includes offshore accounts such as OSA (Offshore Accounts), FT (Free Trade Accounts), and NRA (Non-Resident Accounts), as well as offshore bonds, funds, banks, and insurance services [3]. Institutional Dimension - It encompasses applicable laws, judicial arbitration, regulatory rules, tax policies, and compliance standards [4]. Governance Dimension - This involves cross-border regulatory cooperation, data governance, anti-money laundering, anti-tax avoidance, and ESG (Environmental, Social, and Governance) standards [5]. Spatial Dimension - It relies on offshore financial functional zones, international financial centers, and cross-border cooperation platforms [6]. Strategic Dimension - The system aims to serve the internationalization of the Renminbi and the Belt and Road Initiative, aligning with high-standard rules such as CPTPP and DEPA, and requires pilot verification through free trade experimental zones [6]. Core Functions of the Offshore Financial System - The system's core functions are reflected in three aspects: establishing institutional pricing power for Renminbi-denominated assets, optimizing global capital efficiency, and transforming domestic regulatory experiences into international rules [7][8]. Challenges in the Current System - The current offshore financial system faces challenges such as institutional supply lagging behind strategic demand, fragmentation of regulations, and a lack of a unified legal framework [9][10][11]. Proposed Institutional Framework - A proposed "1+N+X" framework includes the establishment of an Offshore Financial Law, specialized business regulations, and local differentiated pilot programs to enhance the system's effectiveness [13][14]. Legal and Taxation Improvements - Recommendations include creating an "offshore legal applicability zone," upgrading the account system to integrate both domestic and foreign currency functions, and optimizing the tax system to attract more offshore entities [14][17]. Integrated Innovation - The article advocates for a "six-in-one" integrated innovation approach that combines finance, law, taxation, governance, spatial planning, and international rules to create a robust offshore financial ecosystem [15][18]. Future Direction - The construction of a Chinese offshore financial system should focus on institutional confidence, avoiding the mere replication of models from Hong Kong and Macau, and instead, aim to be a rule-setting entity in the global financial landscape [20][21].

Core Viewpoint - The Hong Kong High Court's ruling to freeze Xu Jiayin's family trust assets worth over $7.7 billion has shattered the myth of offshore trusts as a foolproof asset protection mechanism for the wealthy [1][9]. Group 1: Trust and Asset Protection - Offshore trusts are typically used to manage assets (such as stocks, real estate, and shares) by delegating them to overseas institutions, making them legally distinct from the settlor [3]. - Xu Jiayin established an offshore trust to protect his wealth amid the Evergrande debt crisis, transferring $7.7 billion in assets, including stocks and luxury properties, into the trust [3][5]. - The court's decision to freeze these assets was based on Xu's violation of the principles of trust independence and authenticity, as he engaged in financial fraud while transferring assets to the trust [5][6]. Group 2: Business Ventures and Performance - Xu Jiayin expanded his business interests into various sectors, including health, where projects like "Evergrande Health Valley" generated significant revenue, reaching $3.1 billion in a year [6]. - The health product "Yi-Wei-Li," developed in collaboration with a Nobel laureate, reported impressive sales, indicating a strong market presence among affluent consumers [6][8]. - Despite the promising performance of certain business segments, the overwhelming debt crisis in the real estate sector has overshadowed these successes, leaving Xu's family trust vulnerable to legal actions [8]. Group 3: Industry Implications - The ruling against Xu Jiayin serves as a warning to other wealthy individuals who may rely on offshore trusts and legal loopholes to evade debt responsibilities [9]. - The case highlights the increasing global financial regulatory cooperation aimed at closing loopholes for cross-border liability evasion, emphasizing the need for accountability among business leaders [9]. - The incident underscores the importance of adhering to legal and ethical standards in business practices, as shortcuts and deceptive strategies can lead to severe consequences [9].

Core Viewpoint - The Hong Kong High Court ruled on a lawsuit involving the Zong family, focusing on the establishment of offshore trusts valued at $2.1 billion, with ongoing legal disputes between the parties regarding the trust's setup and asset management [2][3][22]. Group 1: Court Ruling and Key Information - The court ordered that the defendant cannot withdraw or encumber assets in the HSBC account, and this order remains effective until the outcome of related lawsuits in Hangzhou [2]. - The plaintiffs, Jacky Zong, Jessie Zong, and Jerry Zong, are the children of Zong Qinghou, while Kelly Zong is his daughter from another marriage [2][3]. Group 2: Evidence and Disputes - The plaintiffs claim that three offshore trusts worth $2.1 billion have not been successfully established, and there are disagreements on how to set up these trusts [3][12]. - The plaintiffs provided evidence including handwritten documents and agreements indicating that Kelly Zong was to establish the trusts, but she has not signed the necessary documents [11][12]. Group 3: Trust Structure and Legal Opinions - Legal experts discussed the concept of a "non-principal trust," where only the interest from fixed capital is distributed to beneficiaries, not the principal itself [15][16]. - The transition from a Private Trust Company (PTC) to a professional trustee is outlined, indicating a two-step process for establishing the trusts [18][19]. Group 4: Ongoing Legal Challenges - The case highlights potential legal jurisdiction issues, as the trust establishment involves both Hong Kong and mainland Chinese laws, which may complicate the proceedings [22]. - The court's ruling is seen as an initial victory for the plaintiffs, but significant disputes remain regarding the existence and management of the trusts [22].

Group 1 - The recent death of Wahaha Group founder Zong Qinghou has sparked a family wealth dispute, bringing family trusts into the spotlight and raising concerns about their effectiveness as wealth preservation tools [1][10] - The concept of offshore trusts is defined as trusts established outside of mainland China, utilizing international legal differences for asset protection and tax avoidance [2][9] - Offshore trusts have gained popularity due to their ability to protect assets from estate taxes and family disputes, but they also carry hidden risks that can lead to legal challenges [9][10] Group 2 - Family trusts in China are designed for wealth protection, inheritance, and management, but there are discrepancies in how they are established compared to international standards [4][6] - Recent cases, such as the one involving Cui Yi, highlight the potential for family trusts to be "pierced" or deemed ineffective if the assets are not properly isolated or if the funding sources are questionable [10][11] - Legal experts emphasize the importance of ensuring that the sources of funds for family trusts are legitimate and that the trusts are established with clear intentions and purposes to avoid legal complications [10][11]