China's Debt_ Swiss Re issues corporate debt alert for China

SOUTH CHINA MORNING POST

Swiss Re issues corporate debt alert for China

PUBLISHED : Monday, 20 July, 2015, 6:19pm
UPDATED : Monday, 20 July, 2015, 6:24pm
Celine Ge
Celine.Ge@scmp.com



A 'hard-landing' by China as a result of bulging corporate debt is among the top threats to the global financial markets, warns the world’s second largest reinsurer. Photo: AFP

A “hard-landing” by China as a result of bulging corporate debt is among the top threats to the global financial markets in the coming one to two years, warns the world’s second largest reinsurer.

The biggest problem facing China is managing its corporate debt – which is twice that of the United States – amid an economic slowdown given that a considerable portion of it is due to mature in the next two years, said Clarence Wong, chief economist, Asia, at Swiss Reinsurance Company, on Monday.

China’s corporate debt, at US$16.1 trillion at the end of last year, is growing rapidly, said a Standard & Poor’s report in June. Bad debts are also on the rise amid signs that Beijing would roll over loans for some firms even though total corporate debt has already ballooned to eight times the size of government debt, the S&P report said.

“With the stock market stabilising, what remains the biggest risk in China is its deteriorating corporate debt and that could potentially drive a hard-landing of its economy in the coming one to two years,” Wong said. “And it is among the key factors we are worried about.”

China’s possible hard-landing spurred by credit risks from a significant slowdown in the property sector is the second-biggest threat to the overall well-being of global financial markets, with the top threat being a Greek exit from the euro zone, according to Swiss Re Economic Research & Consulting.

“The coming two years would see a huge number of Chinese companies required to pay their debts while Beijing is very likely to extend the maturity dates for those who would otherwise default, which might result in even more debts piling up,” Wong said. “We are wondering how the Chinese government is going to deal with it.”

China’s economy is growing at its slowest rate in more than two decades, forcing stimulus measures from Beijing such as lowering borrowing costs, including four interest rate cuts since November and the scrapping of bank lending caps.

S&P estimates Chinese companies may seek up to US$57 trillion in refinancing and new debts from 2015 to 2019, with the country alone contributing US$23 trillion, or 40 per cent, of the global demand.
***

Chân thành cám ơn Quý Anh Chị ghé thăm "conbenho Nguyễn Hoài Trang Blog".
Xin được lắng nghe ý kiến chia sẻ của Quý Anh Chị trực tiếp tại Diễn Đàn Paltalk: 1Latdo Tapdoan Vietgian CSVN Phanquoc Bannuoc . 
Kính chúc Sức Khỏe Quý Anh Chị . 



conbenho
Tiểu Muội quantu
Nguyễn Hoài Trang
21072015
___________
Cộng sản Việt Nam là TỘI ÁC
Bao che, dung dưỡng TỘI ÁC là ĐỒNG LÕA với TỘI ÁC