Tag Archives: Chinese indebtedness

Moody’s downgraded China’s sovereign rating last week. We believe the country is well equipped to deal with debt issues in the short term, but faces profound challenges in the longer term.Moody’s announced on 24 May that it had downgraded China’s long-term local currency and foreign currency issuer ratings to A1 from Aa3, due to its concerns about the rising debt in China. According to our estimate, China’s total debt amounted to Rmb203 trillion as of the end of 2016, equivalent to 261% of...

Rising debts and the risk that the Trump administration introduces protectionist policies are headwinds for the Chinese economy.Chinese GDP grew by 6.8% in Q4 2016 and by 6.7% in 2016 as a whole, in line with our forecast. The pickup in fixed-asset investment in the second half was probably the key contributor to this solid performance.The likelihood of a sharp deceleration in fixed-asset investment in Q1 2017 has declined greatly. Growth in infrastructure should pick up again this month and...