China's fledgling securitisation market showing signs of risk

Singapore

AS CHINA struggles to wean its economy off excessive debt, its fledgling securitisation market has exploded with cash-starved banks, local governments and private firms rushing to convert assets into cash.

China's market in asset-backed securities (ABS), a financing instrument through which a wide range of assets such as loans, real estate, toll ways and scenic parks have been converted into tradable bond-like securities, surged 50 per cent in 2016 alone and now exceeds a trillion yuan (S$203 billion).