China Faces Downside Risk From Overinvestment, S&P Report Says Feb 13
- ID: 2419361
- February 2013
- Region: China
- Standard & Poors
MELBOURNE (Standard & Poor's) Feb. 21, 2013--Investment levels in China have run ahead of returns on investment over the past five years, increasing the risk of an economic correction in the country, according to new report by Standard & Poor's Ratings Services. The report, titled "The Investment Overhang: Despite China's Rebound, US$800 Billion Of Downside Risk Abounds", examines the correlation between China's investment-to-GDP ratio and GDP growth during the 1990s to early-2000s, and explores a China downside scenario arising from overinvestment. It says that China's rate of return from its huge fixed capital investments appears to be diminishing compared to prior periods. "China's heavy dependence on fixed capital-led growth magnifies its economic sensitivity to a correction in investments," said Standard...
Companies mentioned in this report are:
Action: General Comment
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research type: News
This product is a is a brief one-page announcement of no more than 500 words with a quote from the analyst. It is media and investor focused with no accompanying commentary article.