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2008 DEVELOPING SECURITIZATION LAWS IN CHINA 565
DEVELOPING SECURITIZATION LAWS IN CHINA
MIMI HU1
I.
Introduction
Although there is no question that the 2007-2008 downturn in the U.S. housing market was severe, the full extent of the severity remains uncertain. Moreover, as the United States economy falters, the rest of the world—from Europe to Asia—shares the burden.2 The other economic story, somewhat overshadowed recently by the U.S.’s troubles, has been the continuing boom of China’s economy. The timing of the U.S. housing market crisis is precarious, as the Chinese economy nears a crossroads: growing inflation, possible economic slowdown, ongoing corruption, and increasing demand for liberalization from international community.3
After two and half decades of economic reform, China has blossomed into one of the world’s largest economies.4 But its growth relies heavily on its bank-dominated financial system, which has been called the economy’s “Achilles’ heel.”5 Large Chinese banks are state-owned and have always had a close relationship with state-
1 J.D., Boston University, 2008; B.A., Northwestern University, 2005. The author would I would like to thank her parents, Joan and Henry, for their love and support.
2See, e.g., Emma Charlton & Adam Cohen, EU Cuts Forecast, Cites U.S. Slowdown, WALL ST. J., Feb. 22, 2008, at A8; Greg Ip, Fears of Stagflation Return as Price Increases Grain Pace, WALL ST. J., Feb. 21, 2008, at A1; Terence Poon, Export Growth Supports China’s Monetary Policy, WALL ST. J., Feb. 16, 2008, at A4.
3 See, e.g., Andrew Batson, China’s Price Rise is Fastest Since 1996, WALL ST. J., Feb. 20, 2008, at A4; Poon, supra note 2; Victor Shih, China’s Credit Boom, WALL ST. J., Feb. 21, 2008; China Corruption Bank; A Bank Scandal in China, THE ECONOMIST, Mar. 19, 2005, [hereinafter China Corruption Bank].
4 See, e.g., Keith Bradsher, China Reports Another Year of Strong (or Even Better) Growth, N.Y. TIMES, Jan. 26, 2006, at C5. In 2005, China was already the fourth largest economy in the world, behind the United States, Japan, and Germany in economic output. Id.
5 Wendy Dobson & Anil Kashyap, The Contradiction in China’s Gradualist Banking Reforms, 4 (Rotman School of Management, University of Toronto ITP Paper 0609), available at
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owned enterprises (“SOEs”).6 Despite nearly 30 years of gradual banking reforms—and undeniable improvements—Chinese banks are still plagued by an “inability to endure financial crises, poor bank management, risky loan practices, and scandals.”7 Chinese state-owned banks’ most notable problems arise from managing their large amount of outstanding non-performing loans (“NPLs”) and guaranteeing quality new loans.8 This Note addresses this problem facing China’s state-owned banks and examines asset-backed securitization as a possible solution, arguing that asset-backed securitization might provide an effective way to manage NPLs and to increase state owned banks’ efficiencies.
Part II of this Note discusses China’s state-owned banks’ non-performing loan problem and outlines the conflicting goals of reforming the banking system and the need to meet various social demands (and why they sometimes conflict). Subsection II.A provides a brief history of the Chinese banking industry and China’s general economic development. Subections II.B and II.C summarize major reforms in the past two and half decades and the em本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。