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Chinese long-term debt looks like the ‘buy of the year’, says UBS’ Asia bonds chief

By dailymail / Published on Monday, 19 Jun 2017 09:10 AM / No Comments


Briscoe downplayed the notion of China’s debt situation leading to a crisis, arguing that President Xi Jinping has already said that he intends to address the issue in the imminent future and that he has already brought on board the five big regulatory agencies to work on managing the borrowing levels.

Furthermore, there’s no impeding call on the debt.

“China is a net creditor nation and until somebody calls you on your capital – it’s just like the Japanese situation, we’ve been waiting 20 – 30 years for them to implode. Once you run out of capital, then someone can call you on it and then you’re in big trouble but until then they can kick the can down the road a bit further,” he affirmed.

The country’s housing market is, however, priced for a correction, according to Briscoe, given the raft of measures put in place in recent years by authorities such as those restricting mortgage lending and property developer borrowing. Briscoe says that until now these developments have been really healthy and led to destocking over the past two years, leading him to have a very positive underlying outlook on the housing market.

“But the prices have to come off as they’re not socially responsible especially in Tier 1 cities where you have more like 20 – 25 percent house price appreciation,” he cautioned.

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