There is nothing new about the Chinese Premier stating that defaults are likely to rise

There is nothing new about the Chinese Premier stating that defaults are likely to rise. The key for investors is remembering that this will not be a repeat of the Lehman Brothers bankruptcy. These trusts and other Chinese shadow bank loans are not connected like was the case in 2008/09 in the US. However, just as sure as we can be that isolated defaults are not interconnected, so can we be assured that slower credit growth in the shadow banks will weigh on Chinese growth and it is likely to slip into the 6% range over the next year and any stock or sector that require robust Chinese growth are likely to be subjected to downside risk. The key here is stock selection, and ensuring that exposures all have strong balance sheets and a robust operating model as these are the easiest and the best form of risk management.


MORE ON



2 topics

Livewire News brings you a wide range of financial insights with a focus on Global Macro, Fixed Income, Currencies and Commodities.

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.