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雷达卡
Table of contents
Overview: China’s credit boom – yesterday, today and tomorrow 2
Origins and context: Putting China’s credit boom into perspective 4
Chinese leverage in an international context 4
Three macro reasons why investors worry about credit in China 6
Policymakers recognize the risks and have begun to take action 11
Where has the credit gone, and where do the risks lie? 13
Identifying where the credit stands – at a glance 13
Bank loans: Risks are manageable, but areas of concern emerging 14
Corporate bonds growing fast, risks concentrated in LGFVs 18
Shadow banking risks high; current risks manageable but beware of future expansion 21
Overcapacity sectors and LGFV bonds: Two areas posing higher risk 22
Bottom line: Bottom-up analysis reinforces top-down concerns 25
Risks, strategies and outcomes: Earlier action averts costlier results 26
China’s strategy may lean towards more proactive, with periods of forbearance as needed 29
Why not a purely proactive approach? Policymakers need to avert potential triggers of credit crisis 30
Quantifying the potential losses 33
China banking sector recaps show different options are available 38
Different remedies and implications on fiscal costs, output loss, and public debt increases 40
Credit market: Stick with stronger balance sheets, avoid weak SOE credits 41
Equity market: Earnings/valuation uncertain during adjustment process; tipping point visibility low 42
Disclosure Appendix 46
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