HONG KONG — China has overtaken the United States as the world’s biggest issuer of corporate debt, despite worsening cash flow at Chinese companies since the financial crisis, according to a report released Monday by Standard & Poor’s.
In a study that highlights the rising risk to the global economy posed by China’s informal shadow banking sector, Standard & Poor’s, the ratings agency, found that China’s nonfinancial companies had total outstanding bank loans and bonds worth $14.2 trillion at the end of last year, compared with $13.1 trillion in the United States.Moreover, S.&P. expects strong growth in new borrowing and the need to refinance existing debt will push China’s corporate debt levels to more than $20 trillion by the end of 2018, accounting for a third of worldwide corporate borrowing.
Borrowings in the Asia-Pacific region will overtake both North America and Europe by 2016 as China and neighboring countries widen their lead as the world’s largest group of corporate borrowers, according to S&P. Bonds (BCOR), as opposed to loans, will also become a more important source of financing, increasing 3.5 percent, or almost $3.1 trillion.
