Disposal and securitization of non-performing assets: international experience and prospects in China

GAO Bei1 ZHANG Ming2

(1.School of Economics and Finance, Xi’an Jiao Tong University)
(2.Institute of World Economics and Politics, Chinese Academy of Social Sciences)

【Abstract】China’s economic growth has slowed, which will not be reversed in the short term; its corporate sector has started to cut leverages; and its real estate market is cooling. They will combine to lead to surging non-performing loans in the banking system. Considering the background of the accumulation of non-performing loans, the banks’ operating environment, as well as the government’s debt burden, China cannot repeat its old practice of non-performing asset disposal. China has had no other choices but relying on market forces to handle its non-performing assets. From a historical perspective, asset securitization has played an important role in all countries relying on market forces to handle non-performing assets. In China, it has become appropriate to develop non-performing asset securitization. In the future, as relevant systems improve, China is set to witness the rapid development of non-performing asset securitization.

【Keywords】 disposal of non-performing assets; non-performing asset securitization; non-performing loans in the banking system;

【DOI】

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    Footnote

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This Article

ISSN:1007-0974

CN: 11-3799/F

Vol , No. 01, Pages 124-142+7

January 2018

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Article Outline

Abstract

  • 1 International experiences in the disposal of non-performing assets
  • 2 China’s disposal of non-performing assets
  • 3 Status quo and prospects of non-performing asset securitization in China
  • 4 Conclusions and policy suggestions
  • Footnote