China ABS Market Outlook

the china abs market outlook for 2018 and beyond is optimistic. despite the slowdown in economic growth in recent years, the country continues to be an attractive growth destination for foreign investors. this is due to the burgeoning middle class, increasing consumer demand, and the continued development of advanced infrastructure and services. since the 2008 global financial crisis, the chinese government has continued to take steps to ensure financial stability and to promote asset-based securities (abs) as an alternative financing tool for borrowers. this has resulted in a flourishing securitization market in china, which has become the second-largest abs market in the world by issuance volume, after the united states. as demand for abs grows, its performance will be further enhanced by technological advances and a more investor-friendly dynamic. increasingly, foreign investors are being encouraged to enter the abs market in china. further, traditional bond issuers in china may be further encouraged to shift to abs financing as the chinese government has taken steps to cap the burden of short and long-term borrowing. this could include, for example, caps on interest rates and requirements for credit rating. overall, the outlook for the chinese abs market in 2018 and beyond is promising, with potential investors having access to an increasingly sophisticated financial ecosystem. the next few years could bring more efficient processes, improved investor confidence, and lower costs for both issuers and investors. abs will also play a bigger role in financing china’s economic development in the long run. this comes as the government has identified abs as an important tool for forcing economic and financial reform. as such, regulatory support for attractive, well-structured abs transactions is expected to only increase in the future. to conclude, the outlook for china abs market in 2018 and beyond looks bright. the market is poised to become indispensable for the chinese economy. with the continued development of the economy and the further liberalization of the financial industry, the outlook for abs remains bullish.