Mortgage securitization is a long way off in China, and will not occur until the government makes major changes to its legal and investment framework, a research report recently issued in Beijing concluded.

"Presently, nationwide implementation of mortgage-backed securitization is still not feasible, although certain areas already possess the basic conditions where securitization may be done on a trial basis. If the trial proves successful, it may be expanded to the rest of the country," said Julia Fan, of China International Capital Corporation (CICC), a joint investment bank venture between state-owned Construction Bank of China and Morgan Stanley Dean Witter.

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