China plans bad debt fund for foreigners

[BEIJING] A unit of one of China's biggest bad-debt banks plans to woo foreign investors with a US$1 billion fund for soured property loans and distressed real estate assets, reopening the sector to outsiders after a failed attempt last decade.

That the fund is being launched just as growth in the world's second-largest economy has slowed to an 18-month low and the housing market is losing strength is no coincidence.

China Orient Summit Capital, 80 per cent owned by China Orient Asset Management Corp, will use its connections to help foreigners invest in an attractive but sometimes treacherous market for distressed assets, chief executive Lijian Chen said. "We see the cycle coming," he said, referring to an expected cooling down in the housing market. "Especially since this is synchronised with the economy."