Phani, I think you have a more complicated issue than just trust. It likely involves collectivism/individualism, comfort with open conflict and other cultural differences that are common between Chinese born students and North American born students. For example, things that predict performance well in the US like personality and motivation are not nearly as effective in China. An unmotivated American will often perform poorly, where a similarly unmotivated Chinese will still perform well, because the Chinese worker feels a responsibility to the group to do his or her best that the American worker typically doesn't feel. Similarly, they may not want to experience the open conflict of feedback, because they may assume that people are doing their best and criticism might undermine the cohesiveness of the group.
Having said that, this is what I do with my MBA students. I first have them read "Methods of Peer Assessment" by Kane & Lawler (I tried to attach it but it was too big, email me if you want the pdf.). It's a little old but it does a good job of explaining the difference between peer nomination, peer rating and peer ranking and showing what each method is effective for. I then give them the attached assignment which has them do a peer ranking. After they turn this in we discuss what was difficult and what they liked about it. Most students don't really like raking each other (managers tend to like it because it helps to discriminate when making administrative decisions). I then give them the opportunity to come up with a different method for giving each other feedback. I ask them to come up with their own criteria, choose if they want to give the feedback as a narrative, or use ratings or rankings. What I get is high buy-in because they had to discuss what success looks like for their particular team, what should each person be doing and how they want to give feedback to each other, which usually results in a discussion of "how do we help each other be the best without it hurting anyone's feelings."
This may be way more than you wanted to use to solve this situation, but it works well for us, since our teams remain throughout the program and they are able to use the system they developed for each class as they progress. Perhaps immersing the Chinese students in the process of developing a feedback mechanism would overcome their cultural reticence to provide feedback. Hope this helps and you are free to use and modify my assignment.