Opportunities for Foreign Credit Funds in China

Date20 July 2020
AuthorXiaoxue (Stella) Wang,Andrew Fei,Zhongyun Yi,Stanley Zhou
Published date20 July 2020
Subject MatterBanking & Finance
2020/9/10 Opportunities for Foreign Credit Funds in China | China Law Insight
https://www.chinalawinsight.com/2020/07/articles/finance/opportunities-for-foreign-credit-funds-in-china/ 1/9
Opportunities for Foreign Credit Funds in China
By King & Wood Mallesons on July 20, 2020
Written by: Stanley Zhou, Xiaoxue (Stella) Wang, Andrew Fei and Zhongyun Yi, King
and Wood Mallesons
Recently, many foreign credit funds have their sights set on the Chinese market. With the
further opening-up of the capital account and the Chinese government’s commitment to
create a favorable business environment for foreign investment, there are now more
channels and methods for foreign credit funds to invest in Chinese assets. The main
asset types favored by foreign credit funds are Chinese real estate, non-performing
assets and other types of credit assets portfolios, with investments being made using
increasingly diversified structures. This article discusses the key channels through which
foreign credit funds can invest in Chinese assets and the key PRC legal issues
associated with them.
1. Direct financing and investments
Providing cross-border loans to Chinese enterprises and directly acquiring Chinese
domestic assets have become the easiest and most convenient channels for foreign
capital to enter the Chinese market. This is due to the gradual expansion of the types of
eligible domestic borrowers, the gradual relaxation on the amount and currency of foreign
debt that Chinese enterprises can borrow as well as the introduction of pilot programs to
facilitate cross-border transfers of domestic assets. Having said this, investments into the

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