China's top companies will likely see a slowdown in breakneck growth over the next 18 months, under pressure from the US economy and concerns over the "Made in China" tag, Standard & Poor's said Tuesday.
The international ratings agency said in a report that leading Chinese companies were currently enjoying strong growth, with earnings of the top 200 firms climbing 23.3 percent in 2006. But they had to be aware of potential risks, including negative real interest rates, inflation and excessive debt-fuelled expansion, which was putting their credit rating at risk.
The firms also had to be aware of a potential slowdown in the US economy, increasing protectionism hitting exporters and scrutiny of the "Made in China" label, which has been damaged in a series of food scandals and product recalls.
"The Chinese economy looks immune to any negative development or threats from the rest of the world at this time," said S&P credit analyst Ryan Tsang. "The economy simply runs over obstacles such as high oil prices, and liquidity and credit crunches, and powers ahead. "But the markets could be lulled into underestimating and under-pricing risks during long periods of strong growth and high earnings."
Comments
Comments are closed.