The Chinese corporate bond market has overtaken the United States as the
The Chinese corporate bond market has overtaken the United States as the world’s biggest and is set to soak up a third of global company debt needs over the next five years, according to rating agency Standard & Poor’s, underscoring the growing risk China’s debt market is imposing on the global financial system.
Chinese corporate borrowers owed $14.2 trillion (8.37 trillion pounds) at the end of 2013 versus $13.1 trillion owed by U.S. corporations with the switch in rankings taking place a year earlier than it had expected, S&P said on Monday.
The Asia-Pacific region, led by China, is seen accounting for half of global corporate debt financing needs of $60 trillion over the five-year period to 2018 when the region will account for more than half the projected total debt outstanding of $72 trillion.
China, the world’s second-largest economy is currently financing a quarter to a third of its corporate debt through its shadow banking sector and this had global implications, S&P said.