Logo ecsa group 300x

CHINA: Attempts to Control Indebtedness

In 2017, the GDP-growth (6.9%) officially scored the first light acceleration since 2010. The official industrial purchasing manager index PMI (Feb. ’18: 50.3) point out a weakening of growth expectations of the industry.

Upon the vice Prime Minister, Liu He, China will maintain its reforms’ program: opening of the financial and services’ sectors to foreign investors and qualitative economic growth focused on environmental protection and technological progress (artificial intelligence, electric vehicles and robotics).

The economy is marked by strong imbalances as it is still excessively based on exports and investments and very dependent on credit stimulus and on the public sector. The run out of fiscal impulses and the slowdown of the growth represent the next serious conjuncture risks.

According to the Bank of International Settlements the total indebtedness exceeds 250% of GDP. In the past years, credit defaults multiplied and in the medium-term, the financial system could not avoid depreciations. After a period of strong support to the economy by the government, the Central Bank will try to limit the indebtedness, especially through focused regulation of credit activities of the banks and the “shadow banks”. Even if the inflation rate (Dec.: 1.8%) has grown to its highest level of the past six years, an increase of interest rates is less probable as it would put under pressure financial companies that are already highly indebted. As selective stimulating instrument to the growth, the Central Bank could decrease the mandatory reserve share for institutes granting credits to small and medium enterprises.

April 2018

ECSA Chemicals AG
Burgauerstrasse 17
CH-9230 Flawil (Switzerland)

Via Luigi Favre 16
CH-6828 Balerna (Switzerland) 

T. +41582119100
F. +41582119101

ECSA Maintenance AG
Burgauerstrasse 17 
CH-9230 Flawil (Switzerland)

Via Luigi Favre 16 
CH-6828 Balerna (Switzerland)

T. +41582119300
F. +41582119301

ECSA Energy SA
Via Luigi Favre 16 
CH-6828 Balerna (Switzerland)
T. +41582119500
F. +41582119501

con Unico Socio
Via Lavoratori Autobianchi 1 
I-20832 Desio (MB)
(Stabile n. 15 - Polo Tecnologico della Brianza)
T: +39 0362 625 421
F: +39 0362 304 361
P.IVA IT00222470130

Porta Ticino Easy Stop SA
Via San Giorgio 37
CH-6877 Coldrerio
T. +41582119910
F. +41582119911

This website uses cookies to enhance your experience. By continuing, you are agreeing to our Cookie Policy.