China Collateralizes Its Debts

China is the world's largest official creditor. It has taken far reaching measures to insure that it is repaid on time, with interest and on a first priority basis. Forty of those 50 loans are underpinned by a source of collateral that can be seized in the event of default. But contrary to conventional wisdom, chinese stateo lenders rarely ask their borrowers for physical assets as sources of collateral.