China corporate debt burden climbs, defaults to rise: S&P

Hong Kong

CHINA'S corporate debt market, already the largest in the world, has continued to worsen as the world's second largest economy slows, and defaults are expected to increase, rating agency Standard & Poor's said in a report on Thursday.

Sovereign support could be forthcoming in the case of state-owned enterprises but its scope and effectiveness was uncertain, S&P said, while pointing to the recent state intervention during the stockmarket turmoil, the ratings agency said. "The Chinese central government's 'capitalism with Chinese characteristics' has led to the corporate sector (including state-owned enterprises) incurring more debt than the sovereign," the agency said in a report, noting that t…