China's Asset-Backed Securities Market Booms but Faces Oversight Risks

China's asset-backed securities market is growing rapidly, reaching $292B in 2022, but remains small relative to banks' balance sheets.

Mortgage-backed securities account for the largest share of China's ABS market. Interlinkages raise contagion risks if problems emerge.

Recent fraud case involving inflated asset values highlights oversight weaknesses. Lessons from 2008 crisis relevant.

Liquidity issues at property developers like Evergrande could spill over. But credit quality higher than 2008.

Policymakers oscillate between spurring growth via ABS and containing risks. Short-term focus raises systemic vulnerabilities.