Assets managed by Chinese trust companies grew at a slower pace in the first quarter of 2014 from the previous quarter, data from an industry association showed on Wednesday, reflecting a slowdown in the broader economy.

The China Trustee Association said assets managed by the country's 68 trust firms totaled 11.7 trillion yuan ($1.9 trillion) at the end of March, up 7.5 percent from the end of December.

The quarterly growth pace eased from an average of 11.8 percent between 2010 and 2013. Since the first quarter of 2013, the quarterly growth rate stayed between 7 percent and 8.3 percent.

"We must be mindful of challenges lying ahead," Wang Lijuan, deputy head of the association, told reporters at a press conference.

"The economic slowdown is adding pressure to the industry and the previous model of fast expansion in trust assets has become unsustainable, as the government shifts its focus to structural reforms."

Wang said the industry is also facing competition from a mushrooming of ­innovative financial products, while the government's push toward interest rate ­liberalization will pull down the return ratios of trust assets.

Data from the association showed the annualized return rate of trust products averaged 6.4 percent at the end of the first quarter, down from 7.4 percent in 2013.

Trust products, sought by depositors seeking higher returns, have seen explosive growth in China in recent years, with total assets nearly quadrupling from 2010.

But with several high-return trust pro­ducts having turned sour recently, investors are increasingly worried about the risk.

China Credit Trust Co, for instance, said in mid-January that investors in a high-yield 3 billion yuan product might not be repaid when the product matures on January 31.

On January 28, the company announced they have found new buyers, which analysts said this might help cover some losses for investors.

Trust product defaults have taken place before, but investors haven't suffered losses as troubled borrowers have generally been bailed out, either by the institutions offering the product or by the government. 

Sinolink Securities Research Institute reported in late January, citing trust information portal use-trust.com, that trust loans worth 900 billion yuan will come due this year, up 12.5 percent from 2013.

In addition, the industry is being challenged by the emergence of Internet finance businesses, such as money market fund Yu'ebao from the country's e-commerce giant Alibaba Group Holding Ltd, as well as similar products launched by Baidu Inc and Tencent Holdings Ltd.

Yu'ebao, launched in June 2013, said its users surpassed 81 million as of February 26. The fund had raised 541.3 billion yuan as of March 31, helping users gain 7.5 billion yuan.

Tencent's online monetary fund product Licaitong, released on January 15, reportedly amassed 30 billion yuan by February 21.