China's Drive to Open up the Non-Performing Loans Market to Foreign Investors

On March 27, 2020, the China Banking and Insurance Regulatory Commission (CBIRC), China's banking and financial institution regulator, issued the Implementing Measures on Administrative Permission Matters of Non-Bank Financial Institutions (the 2020 Measures) (非银行金融机构行政许可事项实施办法), which immediately took effect and replaced those promulgated in 2018 (the 2018 Measures). This regulation change, together with recent developments in the non-performing loans (NPL) sector, signals China's willingness to further open up its NPL market to foreign investors. In particular: (i) entry into the China-U.S. trade deal which permits U.S. financial service providers to apply for provincial asset management company (AMC) licenses; and (ii) endorsement by local governments to set up other forms of NPL investment platforms by foreign investors will be discussed.