With the sluggish economy, Chinese borrowers are finding it hard to pay their debts, causing bad loans to pile up, a problem that’s foremost in the minds of the government, banks and asset managers.
According to Reuters, Chinese asset managers are unloading bad loans through online auction using sites such as Alibaba, the mammoth e-commerce firm. Government-owned Huarong Asset Management, the country’s largest bad loans company, is set to sell its soured loans through Alibaba.
Huarong follows China Cinda Asset Management, which sold 24 billion yuan ($3.87 billion) of bad loans using Alibaba’s online platform Taobao, said Reuters. Alibaba is in discussions with two other firms — Great Wall Asset Management and Orient Asset Management — for a similar online sale.
“The market for asset management is booming,” Reuters quoted Lu Weixing, auction manager at Taobao, as saying.
The Chinese government is targeting a 7% growth this year, the slowest in more than two decades. The International Monetary Fund is less optimistic, as it predicts GDP growth at 6.8% for 2015.
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