Troubled China Credit Could Cost Banks $1.7 Trillion, S&P Says
- Ratio of problem credit could triple to 17% by 2020: S&P
- Growth rate of China’s debt ‘not sustainable for long’
The warning adds to a drumbeat of concern over a surge in Chinese corporate credit since the global financial crisis.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
S&P Global Ratings said China’s banks may need to raise as much 11.3 trillion yuan ($1.7 trillion) of fresh capital from 2020 because of troubled credit, should a corporate debt binge fail to slow.
The potential cost, highlighted in a statement on Tuesday, equals 16 percent of last year’s nominal gross domestic product, S&P said.