Chinese Market Embraces Structured Finance

The Chinese market is posed to continue its foray into ABS in 2017 and beyond, according to a recent Bloomberg article.

In just two years, the Chinese ABS market has been able to grow, in value, from zero to $61.5 billion, a pace Bloomberg says is "only getting started." In 2016, structured notes backed by receivables accounted for 54 percent of all ABS issued in China, up from 33 percent in 2015, according to official data released last week.

The article also notes that the numbers can be expected to balloon if the U.S. is any gauge, as in 2015 total ABS issuance in China represented only 0.56 percent of GDP, compared with 1.4 percent in North America. The article concludes that "the reality is there's no stopping this juggernaut: China's relationship with structured finance is about to get serious."

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