Introduction: Sponsored by Green Legal Global Alliance (GLGA) and professionally supported by Beijing DOCVIT Law Firm, the “3rd Forum on China’s Economic Development and Legal Regulation and Release Ceremony of GLGA Blue Book of China’s Non-performing Assets 2018” was held in Beijing on Aug. 3, 2019. This forum is the third GLGA annual forum following GLGA’s 1st Forum on Financial & Capital Market Development and Legal Regulation and 2nd Forum on New Driving Forces for China’s Economic Development and Legal Regulation. 

More than 80 representatives from central enterprises, state-owned enterprises, financial institutions and institutional investors attended the meeting, including National Council for Social Security Fund, Finance Research Institute of Development Research Center of the State Council, Peking University, Tsinghua University, Orient Asset, Great Wall Asset, CINDA Asset, Beijing AMC, Tianjin AMC, Hebei AMC, China Everbright Bank, Postal Savings Bank of China, HuaXia Bank, Industrial Bank, Bank of Beijing, Bank of Jiangsu, China Beijing Equity Exchange, Australian Securities Exchange (ASX), etc. 

This forum focuses on the road of benign development of China’s non-performing asset industry in the context of high-quality economic development. At the forum, Green Legal Global Alliance (GLGA), Sina Finance, and Beijing DOCVIT Law Firm jointly issued Green Legal Global Alliance (GLGA) Blue Book of China's Non-performing Assets (2018) and founded GLGA Bankruptcy & Non-Performing Assets Research Center, of which CHEN Jianming was engaged as Director. 

Opening speech 

LIU Guangchao, President of Green Legal Global Alliance (GLGA), founding partner and Director of Beijing DOCVIT Law Firm, presided over the first half of the forum. WANG Zhongmin, former vice-president of the National Council for Social Security Fund, made an opening speech on "double-regulation logic of market clearing". He proposed the interweaving of two mechanisms and two logics, and believed that we could use the combinational logic of SPV and borrow the front-end financial scenarios. 

Keynote speeches 

ZHANG Chenghui, former director of Finance Research Institute of Development Research Center of the State Council delivered a keynote speech Market Disposal of Non-Performing Assets. Zhang reviewed the process of how the Big Four state-owned banks stripped off their non-performing assets, and believed that China was now experiencing a climax of the second wave of non-performing financial assets, but this time, it's different from the past, when state-owned non-performing assets bore the brunt, as small and medium-sized commercial banks were now having a more serious problem with non-performing asset, and the risk of non-bank financial institutions and non-state-owned institutions was on the increase. 

ZHANG Chenghui, former director of Finance Research Institute of Development Research Center of the State Council delivered a keynote speech Market Disposal of Non-Performing Assets. Zhang reviewed the process of how the Big Four state-owned banks stripped off their non-performing assets, and beleved that China was now experiencing a climax of the second wave of non-performing financial assets, but this time, it's different from the past, when state-owned non-performing assets bore the brunt, as small and medium-sized commercial banks were now having a more serious problem with non-performing asset, and the risk of non-bank financial institutions and non-state-owned institutions was on the increase. 

YANG Fang, Chief Financial Officer of New Hope Group, made a speech Reflections on Corporate Investors’ Participation in Non-performing Asset Market. Ms Yang said in her speech, the essence of solving non-performing assets was to trade time for space; the formation of non-performing assets was firstly caused by unwise lending, which led to the emergence of companies that could not repay their debts, which finally need to be resolved by the debt restructuring system and mechanism. 

DONG Yuping, Vice General Manager of Strategic Development Planning Department (Research Institute) of China Orient Asset Management Co., Ltd., gave his opinions on the current market of non-performing assets and how to solve non-performing assets. Dong suggested, defusing financial risks and disposing of non-performing assets was a promising market. We should give full play to the role of market institutions with the Big Four AMCs as the core, solve non-performing assets as soon as possible, and reduce the financial risk a tolerable level. 

Release and interpretation of GLGA Blue Book of China's Non-performing Assets 2018 

Afterwards, the GLGA Blue Book of China’s Non-performing Assets 2018 was officially released. 

Lawyer SHI Guanghu, Beijing DOCVIT Law Firm’s senior partner, as the head of blue book, interpreted GLGA Blue Book of China’s Non-performing Assets 2018, including the original purpose of Blue Book of China’s Non-performing Assets, deep interpretation of Blue Book of China’s Non-performing Assets, change in the role of lawyers in disposal of non-performing asset, and future development prospects of China’s non-performing asset. Shi said that, on the basis of in-depth investigation and study of China’s non-performing asset industry, the Blue Book of China's Non-performing Assets was compiled in the hope of providing guidance to the industry and reflecting the innovation of the non-performing asset industry, and it had certain academic and public-benefit value. 

GLGA Bankruptcy & Non-Performing Assets Research Center opening ceremony and director appointment ceremony 

At the forum, Green Legal Global Alliance (GLGA) officially founded the Bankruptcy & Non-Performing Assets Research Center, and CHEN Jianming was engaged as Director thereof. 

Subsequently, Director Chen delivered a speech. He believed the research center shall adhere to a few principles: 1. Draw on others' successful experience and learn widely from others' strong points. 2. Keep pace with the times, timely gain an insight into the development demand of the market, pay close attention to the hot topics and difficult problems in market development, and do research in a down-to-earth manner. 3. Be objective, independent and truth-seeking, give priority to empirical research, and objectively provide valuable research achievements. 4. Ready to cooperate and share; the research center is an open platform, which is expected to try its best to attract multi-party cooperation. 

Keynote speeches 

Director Chen presided over the second half of the forum. Ms XUE Ruojun, Director of Strategic Customer Department of China CINDA Asset Management Co., Ltd. made a keynote speech on the exploration of business model of non-performing asset in the current regulatory situation. She pointed out, in the second half of 2017, the regulatory authority put forward a regulatory requirement for the Big Four AMCs to return to their main business, presenting a greater challenge for the balance between compliance risks and business risks. 

ZHANG Weichun, President and Executive Committee Chairman of ChongWa (Macao) Financial Asset Exchange CO., Ltd. made a keynote speech Innovation of Non-Performing Asset on Overseas Market. Zhang analyzed the new opportunities of non-performing asset market, pointed out that non-performing asset market presented the characteristics of diversified participants, diversified disposal methods and fine asset attributes, while facing the opportunities and challenges of marketization, standardization, internationalization and specialization. 

YANG Tiange, Co-President of China Science & Merchants Investment Management Group, made a speech on “Problems and difficulties in the process of judicial disposal of non-performing asset”. Yang expressed his views from four aspects: undercurrents at the stage of case-filing and at the stage of surveillance, the twists and turns at the stage of realization, and repeated delays in distribution. 

GAO Jiaqing, Executive Vice President of China Beijing Equity Exchange, made a speech on “Disposal logic of non-performing asset on the trading floor and reflections on financing upgrade” and, based on China Beijing Equity Exchange’s cases, interpreted non-performing asset’s disposal trend and investment opportunities, asset disposal and reorganization financing. 

DENG Yanbin, Executive Director of Lakeshore Capital, expressed her views on the present development situation and practice of China’s non-performing asset market. She pointed out that there were a lot of uncertainties on the non-performing asset market, and the disposal of non-performing asset is a localized business, which required in-depth analysis of the market to solve the problem of liquidity. 

YANG Kai, Assistant to General Manager of Hongxin Asset Management Co., Ltd. General Manager, interpreted the development characteristics of this round of non-performing asset. He said that, compared with the first round, the development of this round of non-performing asset had a significantly different style. This round of non-performing asset had a lot of illicit market phenomena, and he believed that non-performing asset was a niche, professional investment field and a high-risk industry. 

Roundtable 

At the forum, the guests had an in-depth exchange of views on such topics as “Policy and technology driven: evolution of non-performing asset investment strategy and diversified extension of investment forms”, “Obstacles and countermeasures in the acquisition & disposal of non-performing financial assets and non-performing non-financial assets”, “The development trend of banks’ non-performing asset and the innovative ways to resolve its pressure in the new regulatory situation”, “AMC and AIC’s non-performing asset investment development bottleneck and innovative cooperation models”, and “Win-win cooperation between international capital and local institutions”. 

Closing speech 

LIU Guangchao, President of Green Legal Global Alliance (GLGA), founding partner and Director of Beijing DOCVIT Law Firm delivered a closing speech. LIU Guangchao said, “Sina, as a leader of the new media industry, has been recording and promoting the development of the times”. GLGA and Sina would continue to, in line with the times, pool cross-industry forces and promote the green, sound development of the industry. Liu also said, GLGA would stick to being a good cross-industry platform and would never forget its mission of ”building a green, three-dimensional legal ecosphere”. At present, GLGA has set up 7 research centers: New Driving Forces for China’s Economic Development and Legal Regulation, Financial & Capital Market, Law Tech and Legal Finance, "Belt and Road" and International Cooperation & Exchange, Corporate Compliance and Risk Prevention & Control, Entrepreneurs’ Law Quotient and Entrepreneurship & Innovation, and Bankruptcy & Non-Performing Assets. GLGA would continue to cultivate backbone force and cross-industry talents, implement valuable research achievements, and make beneficial explorations for the benign development of the industry.