China NPLs: Why Global Investors Are Paying Attention to Non-Performing Loans
Over the past few years, China’s non-performing loan (NPL) market has been increasingly drawing in investors from all around the world. Many global funds, distressed asset purchasers, and institutional investors are discovering the NPL portfolio opportunities available in China as both a challenge and an opportunity for significant gains. China's growing NPL sector has entered the global stage as a result of the second-largest economy in the world facing structural changes, increasing credit strain, and changes to the economy. To determine why investors are paying attention to Chinese NPLs, it is necessary to gain an understanding of what NPLs are, how they occur, and what the investment potential is. What Are NPLs and Why Do They Matter? Non-performing loans are classified as loans where borrowers have defaulted on repayment schedules for at least 90 days. The rise in non-performing loans in China can be attributed to economic restructuring, changes to the environment of s...