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BlackRock Asian Credit Head says China can handle a financial crisis 

May 19, 2016

Tony Boyd, Financial Review

A leading investor in Asian credit has downplayed the prospect of a financial crisis in China and welcomed the recent increase in bond defaults by Chinese companies.

Neeraj Seth, head of Asian credit at BlackRock, which has $US4.7 trillion ($6.5 trillion) in assets under management, says the rise in bond defaults is a sign of maturity emerging in China's capital markets and an outward sign of the economy restructuring.

"China has a bank-focused market when you look at the debt side of the equation," he told a BlackRock conference in Hong Kong.

"When you look at the banks, which have been the core of providing the credit in the system, the banks have been an extension of the fiscal policy."

Ownership structures mean the banks are still majority-owned by the government.

The biggest implication of that is that it all comes back to the central government in the case of China. Read more

 
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