Assets managed by Chinese trust companies totaled 10.9 trillion yuan ($1.8 trillion) by the end of 2013, increasing 46 percent year-on-year, according to a report by the China Trustee Association on Thursday.

The report said flexibility in institutional arrangements and growth of the wealth management market were the main reasons for the increase.

But challenges also rose as the demand for trust products is decreasing, risks are increasing and competition is becoming more fierce, the report said.