S&P: China's debt will grow 77% by 2021, bold action needed – BBG

Bloomberg reports the latest headlines out from S&P Global Ratings, as the US-based ratings agency warns over China’s rising debt.

Key Points:

China’s total debt could rise 77 percent to $46 trillion by 2021, and its push to rein in heavy corporate borrowing has had "only tentative results so far" 

While the pace of debt expansion is slowing, it still exceeds economic growth, implying that high credit risks could still "incrementally increase."

Credit analyst Christopher Lee noted: "Recent intensification of government efforts to rein in corporate leverage could stabilize the trend of financial risks over the next few years. But we still foresee that credit growth will remain at levels that will gradually increase financial stress."

"Without bold actions, China’s corporate deleveraging aims won’t be met in the next one to two years," Lee added.

Recall that last week, the rating agency cut China’s sovereign credit ratings for the first time since 1999, while revising its outlook to stable from negative.