Cross-Border Securitized Transactions: The Missing Link in Establishing a Viable Chinese Securitization Market

Faleris, Nicholas J. | January 1, 2005

This article proposes that asset-backed securitization in China could be jump-started by first focusing on cross-border (sometimes called transnational) securitization, and by establishing a dependable group of regional investors. Cross-border securitization transactions would enable China to experiment with various packaging of state-owned securities on a trial basis through a transaction-by-transaction process. Thus far, the focus has been specifically on reforming the legal infrastructure so that China eventually would be able to attract investors and capitalize on an emerging market. Rather than attempting to both build an infrastructure and attract asset-backed securitization investors with large, sweeping changes, the market would be better served by building up the securitization infrastructure gradually and by developing a core group of regional investors at the same time.