Although China's legal system does not specifically provide for
asset securitization techniques, a few international securitization
transactions have already been successfully completed by Chinese
companies.
The Chinese government has also begun to experiment with some of
the financial and legal infrastructures which facilitate asset
securitization transactions. For example, restrictions on the
current account convertibility of the renminbi (RMB) have already
been relaxed. More importantly, the Contract Law (which became
effective on October 1 1999) has made important changes to the
Chinese legal system, including the introduction of many legal
concepts and practice with which common law practitioners will be
familiar and which will facilitate securitization transactions.
Securitization in China
The People's Republic of China (PRC) does not yet have any specific
legislation to regulate securitization techniques. Arrangers of PRC
securitization transactions will have to overcome many
difficulties, including achieving a true sale of the receivables,
making security arrangements which will be recognized and
enforceable under...