UBS Says Investors Overreact to China Credit Growth as Lending Winds Down
Investors are “overreacting” to China’s credit boom as the lending expansion over a five-year period trails its emerging-market rivals, according to UBS AG.
While China’s credit growth was “extraordinarily big” last year, one-year trends don’t add up to a “structural bubble,” Jonathan Anderson, UBS’s Hong Kong-based economist, wrote in a note to clients dated yesterday. “China falls more towards the lower half of EM experience” over a five-year period, he said. China’s credit boom is winding down based on an index of monthly new lending relative to underlying nominal gross domestic product, he said.