BEIJING - China's securitization market is providing an increasing share of debt funding for the Chinese economy, according to a report released by global credit rating agency Moody's.

The booming market was largely driven by the growing issuance of securities backed by consumer debt as domestic consumption became an increasingly important driver of the country's economy, the report said.

Securitization accounted for 4.6 percent of the total debt capital market new issuance for the Chinese economy in 2018, up from 3.7 percent in 2017, said Gracie Zhou, a Moody's vice-president and senior analyst.

Over the past year, securitization funded a greater share of consumer debt such as residential mortgages and auto loans, in line with shifts in funding needs, according to the report.

Chinese residential mortgage-backed securities issuance registered a record high in 2018, making it the single largest securitization asset class.

Auto loan asset-backed securities issuance volume also increased, pumping a large deal of money to the auto finance sector.

By the end of 2018, the total value of outstanding securitization notes stood at 2.7 trillion yuan ($402 billion), making China the largest securitization market in Asia and the second largest in the world behind the United States, the report showed.

Moody's expects China's securitization sector to further expand with improved market liquidity, growing access for foreign investors and a more diverse investor base.