trending Market Intelligence /marketintelligence/en/news-insights/trending/UxCULpW7JoffgWZhF6O5tA2 content esgSubNav
In This List

S&P: China corporate borrowing set to slow in next 5 years

Blog

Insight Weekly: Bank boards lag on gender parity; future of office in doubt; US LNG exports leap

Blog

Insight Weekly: Job growth faces hurdles; shale firms sit on cash pile; Africa's lithium future

Podcast

Street Talk | Episode 99 - Higher rates punish bond portfolios, weigh on bank M&A

Blog

Insight Weekly: Loan growth picks up; US-China PE deals fall; France faces winter energy crunch


S&P: China corporate borrowing set to slow in next 5 years

S&P Global Ratings said Oct. 17 that it expects China's corporate borrowing to slow over the next five years due to improving profitability and a tighter lid on investment spending. However, household debt will continue to rise amid an already expensive real estate market.

The rating agency said Beijing has made a "tentative but uneven" start at reducing the level of debt in its economy.

Although firm commodity prices have helped industrial companies improve their balances sheets, lending to households and for government-related infrastructure spending continues to expand.

While banks' asset growth trailed nominal GDP for the first time since 2012, a sign that the policy mindset has shifted to "tight/neutral", Beijing continues to allocate funds to favored sectors, including government-related infrastructure investment.

"After years of credit growth outpacing nominal GDP growth, the country's financial buffers are thinning," said S&P Global Ratings credit analyst Qiang Liao. "Unless China curbs its debt appetite, these buffers will continue to thin, diminishing policy response to financial stress."

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.