China Growth & Credit
Policy uncertainties around trade, unforeseen events like coronavirus outbreak, as well as long-term structural challenges pose credit risks to China, increasing credit differentiation between domestic regions and sectors.
  • SUMMARY
  • REPORTS

  • SECTOR IN-DEPTH
    07 Apr 2021|Moody's Investors Service
     We continue to believe the Chinese government - central, regional and local - remains able and willing to provide extraordinary support to important SOEs, if needed to prevent default.

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    Cross-Sector
    Video
    26 Mar 2021|Moody's Investors Service
    Lillian Li of the Credit Strategy and Research team examines the outcomes of China’s closely watched annual policy meetings. She highlights that a conservative growth target for 2021 and a gradual normalisation of fiscal and monetary policy should enable the government to focus on quality over quantity of output and address structural issues, while avoiding excessive build-up of leverage.
    SECTOR IN-DEPTH
    15 Mar 2021|Moody's Investors Service
    China’s draft Five-Year Plan emphasizes supply chain security, development of the technology sector and increased productivity. Authorities set a conservative economic growth target for 2021, which reflects pandemic-related uncertainty and their desire to focus on the quality of growth.

    VIDEO
    Video
    26 Mar 2021|Moody's Investors Service
    Sales will increase for most sectors as the economy grows 7.5% in 2021. But profitability will be flat for most companies and capital spending will stall deleveraging. Refinancing risk remains high for low-rated private-sector companies.

    SECTOR IN-DEPTH
    25 Mar 2021|Moody's Investors Service
    The People's Bank of China has tightened regulation of financial holding companies (FHCs), as part of its broader effort to ensure the continued stability of the country's financial sector. It has two aims: ensuring the FHCs and their underlying financial institutions maintain good credit quality, and insulating the corporate owners' financial businesses from any potential contagion risk from the corporates' nonfinancial businesses.
    Sub-sovereign
    SECTOR IN-DEPTH
    26 Mar 2021|Moody's Investors Service
    The stability comes despite recent defaults by state-owned enterprises. But the geographic disparity in LGFV bond issuance will increase in 2021 because investors’ perception of government support for LGFVs in less developed regions will weaken further.
    SECTOR IN-DEPTH
    17 Mar 2021|Moody's Investors Service
    Hunan is a province with moderate credit risk; economic development concentrated in provincial capital Changsha. Hunan has a large LGFV sector dominated by LGFVs owned by provincial and Changsha governments. Hunan’s policies and measures to manage LGFV debt are credit positive for LGFVs in the province.
    ISSUER IN-DEPTH
    08 Mar 2021|Moody's Investors Service
    Hunan has recorded rapid GDP growth for more than two decades, boosted by policies focusing on urban and infrastructure development.

    SECTOR IN-DEPTH
    25 Feb 2021|Moody's Investors Service
    Although we still consider systemic risk in China (A1 stable) to be low overall, pockets of potential risk are deepening for less resilient regions. The coronavirus shock has narrowed regional disparities over the short term but we expect them to reemerge, while debt burdens and contingent liability risks are increasing.

    SECTOR IN-DEPTH
    01 Feb 2021|Moody's Investors Service
    China is ready to resume growing its domestic fleet even as global aviation remains depressed, a contrast that will add to Chinese lessors’ credit burden but favor bank-affiliated operators. 

    SECTOR IN-DEPTH
    27 Jan 2021|Moody's Investors Service
    The EU and China late last year agreed in principle to the
    Comprehensive Agreement on Investment (CAI), which represents a major advance in their trade and investment relationship. The agreement, if approved and enforced, likely would be credit positive for China but result in short-term negative credit effects for some of its sectors.

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    PODCAST
    27 Jan 2021|Moody's Investors Service
    Lan Wang of the Banking team and Lillian Li of the Credit Strategy & Research team discuss why China’s move to open up its domestic financial markets to foreign securities firms potentially benefits all parties, despite operational hurdles. Plus, Marina Cremonese of the Asset Management team joins Lan to talk about the future for asset managers seeking to grow their businesses in China.

    ISSUER IN-DEPTH
    14 Jan 2021|Moody's Investors Service
    Our first in-depth report on a Chinese province analyses how Zhejiang’s diverse and rapidly developing economy supports its solid fiscal strength and quick recovery from the pandemic. However, Zhejiang’s fiscal revenue has become more reliant on land sales over the past few years, posing credit risks.

    SECTOR IN-DEPTH
    15 Dec 2020|Moody's Investors Service
    Deterioration in financial metrics is moderating as the economic recovery from the coronavirus pandemic is becoming more broadly based and regulators are resuming de-risking measures. 

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    10 Dec 2020|Moody's Investors Service
    Gene Fang from the Sovereign team, Yubin Fu from Sub-Sovereign team and Nicholas Zhu from the Banking team discuss the credit outlook across a number of Chinese sectors in 2021, including regional and local governments. They outline that risks that are emerging as the government withdraws pandemic-related support and refocuses on deleveraging, but that despite rising defaults China will be able to mitigate any economic volatility.

    KEY CONTACTS
    Lillian Li
    VP, Senior Credit Officer
    Lillian.Li@moodys.com