Credit Trends: Demystifying China’s Domestic Debt Market (S&P Global Ratings)
– China’s domestic corporate debt market, with debt outstanding of $6.6 trillion, is the third-largest domestic corporate (financial and nonfinancial) debt market, trailing the nearly $9 trillion U.S. market and Europe’s $7.4 trillion (considering intra-European debt issuance as domestic funding).
– The market is split between the larger interbank market and smaller exchange markets (Shanghai and Shenzhen). Local government financing vehicles account for a sizable portion of the interbank market debt outstanding (over 60% by new issue count in 2014).
– As in many other countries, a number of market participants, like insurance companies and asset managers, engage in a buy-and-hold strategy for long-term debt in China, and banks typically match shorter-duration debt with their short-term liabilities, favoring liquidity over higher yields, as do money market funds.
– Looking ahead, China must carefully balance its need for economic growth with its need to manage the significant growth of its debt burden.
- Are China’s Hidden Liabilities Behind Moody’s Ratings Downgrade? (Fiscal Times)
- China’s Deceptive Banking ‘Recovery’ (Nikkei Asian Review)
- What Hong Kong Dollar Bond Exposure Means to Investors (The Asset)
- Chinese Stocks: Cheap Long-term Play or Value Trap? (FE Trustnet)
- Aberdeen CIO: India Will Surpass China for Growth (FE Trustnet)
- China’s Mutual Funds Industry Now the Second Biggest in Asia (The Asset)
- Stop Worrying About Chinese Debt? (The Asset)
- Moody’s Downgrades China’s But Changes Outlook to Stable From Negative (Moody’s)
- China’s New Rich Distrusts Financial Advisers (The Asset)
- The Case for Dedicated China Exposure (Cambridge Associates)
- Chart: Chinese Margin Debt vs Other Stock Market Crashes (Guggenheim)
- Fund Managers Are Wary of “Cheap” Asian Stock Markets (FT Adviser)
- China A: Opportunity for Active Managers (William Blair)
- Three Scenarios for the Future of US-China Trade Tensions (NN Investment Partners)
- Shift Your Emerging Market Consumer Exposure from MNCs to Local Stocks (FE Trustnet)