China's 10 trillion yuan ($1.64 trillion) trust industry risks shrinking revenues as the government steps up financial reforms, research from Ping An Trust and McKinsey & Co showed on Nov 28.

About 88 percent of industry revenues are at risk in the long run, with 39 percent of earnings forecast to disappear completely in five years, the research said.

The assets under management of China's trust sector grew sevenfold from 2007 to 2012, exceeding 10 trillion yuan by the end of the third quarter of 2013, making it the second-biggest financial sector in China after banks.

However, the trust sector earns most of its present income from financing riskier borrowers and helping banks and other institutions buy assets that they cannot invest in due to regulations.

These revenue sources will vanish as China liberalizes its financial industry to let investors buy into a range of assets, and give riskier borrowers more access to credit, according to the research.