CHINA Huarong Asset Management Co., one of the country’s four largest buyers and sellers of soured loans, has teamed up with Alibaba Group Holding Ltd. to sell troubled assets through Alibaba’s online marketplace.

    Huarong is putting bad assets worth as much as 51.5 billion yuan (US$8 billion) for sale on Alibaba’s Taobao.com, Huarong said in a statement Tuesday. The assets will be available for sale for 90 days on an online Taobao platform and those that attract high demand will be sold in an open auction process.

    Alibaba’s retail platform, which has about 386 million active consumers, provides an additional channel to get the best deals for Huarong’s assets, said Zhang Yiming, a general manager at Huarong.

    As China’s economy registers its slowest growth in a quarter-century, nonperforming loans among the country’s commercial banks may rise to 2 percent of outstanding loans next year, according to a report by a Bank of China institute, from 1.59 percent as of end-September, as borrowers struggle to repay their debt.

    According to the Huarong statement, the bad loans to be sold are distributed across 24 provinces and cities, with more than half originating from Zhejiang, Jiangsu and Guangdong. China’s manufacturing sector is heavily concentrated in Zhejiang and Jiangsu, and the country’s largest banks have reported seeing higher levels of soured debt from these areas.

    Debtors are diverse, the statement said, including firms from the wholesale, retail, textiles, pharmaceuticals, chemicals and machinery sectors. The total value of collateral is 50 billion yuan, covering 97 percent of the bad debt, Huarong said.

    In November, China’s commercial banks posted an average nonperforming loan ratio of 1.59 percent as of the end of September, the highest since the 2009 global financial crisis.

    As the market for soured debt grows, a range of players are buying up the loans, including local asset managers, trust companies, foreign investors and even ex-regulators. (SD-Agencies)