Banks are bearing the brunt of government interventions to bolster the economy. Most rated corporates will continue to display a degree of resilience to the downturn, but renewed exchange rate volatility arising from policy missteps would make business decisions more difficult and the operating environment challenging.

Drug prices will remain subject to regulatory and legislative changes that would be credit negative for pharmaceutical companies. Hospital consolidation will continue. And Medicaid expansion would be credit positive for health insurers.

China's central government has authorized Chinese regional and local governments (RLGs) three months earlier than usual to issue part of their annual new-money bond quota. This will allow RLGs to better plan and spread issuance over the year and invest in infrastructure to support economic growth. New-money bond issuance will likely exceed RMB3.7 trillion in 2019, well above the 2018 issuance of RMB2.2 trillion.

Ongoing trade disputes will likely have significant sector and regional impacts, including shifts to supply chains. At the same time, any imminent escalation of tariffs is less likely given the resumption of US-China trade discussions.