JPMorgan Warns a Trade War May Trigger China Corporate Defaults
- Escalation would weaken wider economy, hurt credit quality
- Smaller banks most vulnerable to any trade war, Ulrich say
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An escalation of trade tensions could add to defaults in China’s financial system, which is already in the midst of a deleveraging campaign, according to JPMorgan Chase & Co.
If U.S. President Donald Trump imposes sweeping tariffs on Chinese imports later this week, there will be spinoff effects on the country’s financial sector, according to Jing Ulrich, JPMorgan’s vice chairman for Asia Pacific. Consumer demand and the wider economy are likely to weaken and that “may translate into worse credit quality down the road,” Ulrich said in a Friday interview in Hong Kong.