OTC MARKET NEWS Powered By Quantifi

China’s real credit risk lurks in shadow finance 

May 31, 2017

Financial Times

"The downgrading of the world’s second-largest economy’s sovereign debt rating should rank as an important event. But financial markets greeted China’s downgrade last week by Moody’s, the credit rating agency, with their version of a nonchalant shrug. Chinese domestic bond prices remained steady and Hong Kong’s main stock index actually rose during the week.

But the non-event should not lull observers into complacency. China not only has one of the most highly leveraged corporate sectors in the world — with company debts equivalent to about 170 per cent of gross domestic product — it is also engaged in risky manoeuvres to cut an overgrown shadow finance sector down to size."

Read more

Comments are closed on this post.


Submit your email to receive our newsletter