China: Increasing credit differentiation between regions and sectors
While some common trends will shape credit for most Chinese issuers, differences in revenue growth, scope to deleverage, exposure to tight liquidity or policy changes, point to differentiation between regions and sectors.
  • SUMMARY
  • REPORTS

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    0:00
    PODCAST
    13 Dec 2019|Moody's Investors Service
    Sonny Hsu and Minyan Liu from the Financial Institutions team discuss the 2020 outlook for the sector, amid a challenging operating environment with slowing economic growth and trade uncertainties.
    OUTLOOK
    12 Dec 2019|Moody's Investors Service
    Credit pressure will vary, with small banks, distressed asset management companies and leasing companies being more vulnerable due to their greater reliance on wholesale funding.

    SECTOR IN-DEPTH
    11 Dec 2019|Moody's Investors Service
    Pace of decline of broad shadow banking assets continues to slow. Economy-wide leverage edges up as economic growth slows faster than credit.

    SECTOR IN-DEPTH
    02 Dec 2019|Moody's Investors Service
    Policy focus is shifting toward maintaining stability as trade uncertainty continues to weigh on China’s economic outlook. As a result, public sector leverage will rise modestly, led by state-directed investment.
    2020 Outlooks
    PODCAST
    02 Nov 2019|Moody's Investors Service
    In this episode of Moody’s Talks – Structured Finance, Cecilia Chen and Kan Leung from the structured finance team discuss the outlook for China’s structured finance sector in 2020.
    OUTLOOK
    02 Nov 2019|Moody's Investors Service
    Delinquencies and defaults will increase slightly but overall remain low in most Chinese structured finance asset classes in 2020.

    VIDEO
    VIDEO
    27 Nov 2019|Moody's Investors Service
    David Rubinoff from the Sub-Sovereign team explains how China’s slowing GDP growth and rising SOE leverage pose credit challenges for the 31 Tier-1 Chinese regional and local governments that we monitor.
    OUTLOOK
    27 Nov 2019|Moody's Investors Service
    The main challenges facing Chinese provinces in 2020 are the continued slowdown in national GDP growth, which will weigh on their budgetary revenue, and the local state-owned enterprises (SOEs), whose liabilities are around RMB 70 trillion. These challenges are further compounded by China’s competing policy priorities, which are focused on stabilizing debt while also promoting growth.

    OUTLOOK
    27 Nov 2019|Moody's Investors Service
    Year-on-year nationwide contracted sales will remain largely flat. Funding conditons will remain tight. And nationwide inventory levels will rise but remain below the March 2015 peaks.

    OUTLOOK
    26 Nov 2019|Moody's Investors Service
    Slowing GDP growth will reduce revenue and EBITDA growth, and trade tensions will dampen investment. Many rated companies are better equipped than peers to handle negative developments.
    Sovereign and Sub-sovereign
    PODCAST
    20 Nov 2019|Moody's Investors Service
    Martin Petch and Natasha Brereton-Fukui from the Sovereign team discuss how the credit implications of a structural current account deficit will depend on both its size and how it is financed over the next decade. However, on balance, China’s government is well positioned to deal with the challenges it faces ahead.​
    ISSUER IN-DEPTH
    20 Nov 2019|Moody's Investors Service
    A shift into deficit – as China’s rapidly ageing population and other social trends drive savings lower – could weigh on the sovereign's credit profile if it happened faster and to a greater degree than we currently expect.

    SECTOR IN-DEPTH
    11 Nov 2019|Moody's Investors Service
    The interbank market has stabilized, but regional banks are subject to a declining flow of market funds, which could bring adjustment risks to banks with a high reliance on such funds.

    SECTOR IN-DEPTH
    30 Oct 2019|Moody's Investors Service
    Inventory levels will rise because of a slowdown in contracted sales growth but will remain low compared with their recent peaks since March 2016.

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    SECTOR IN-DEPTH
    21 Oct 2019|Moody's Investors Service
    China's regional and local governments play a critical role in mitigating and potentially transmitting economic and financial risks within China’s highly interconnected institutional framework, economy and financial system. Although we consider systemic risk in China to be low overall, our heat-map-based analysis of mainland China’s 31 provinces points to higher potential risks in the west and northeast of the country.
    PODCAST
    21 Oct 2019|Moody's Investors Service
    Jennifer Wong and Edward Demetry from Moody’s Sub-Sovereign Group discuss how China's regional and local governments play a critical role in mitigating and potentially transmitting economic and financial risks within China’s highly interconnected institutional framework, economy and financial system. ​​
    Bank – China
    17 Sep 2019|Moody's Investors Service
    Michael Taylor, Lillian Li and Nicholas Zhu of the Financial Institutions team discuss recent actions from Chinese authorities to restructure several regional banks, and what that means for China’s systemic risk and our assumptions on government support for Chinese banks. ​​​
    SECTOR IN-DEPTH
    10 Sep 2019|Moody's Investors Service
    Regional banks in China have grown in importance as the country's financial system has become more market based. But these banks are showing increased signs of financial pressure.
    SECTOR IN-DEPTH
    09 Sep 2019|Moody's Investors Service
    The recent regulatory actions to take over Baoshang Bank and to restructure shareholders of Bank of Jinzhou and Hengfeng Bank show government resolve in containing contagion risk.

    KEY CONTACTS
    Lillian Li
    VP, Senior Analyst
    Lillian.Li@moodys.com
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