Bangkok--3 Jul--Fitch Ratings
The importance and long-term benefits of China's Belt and Road Initiative for the Asia-Pacific region and China's economic and credit outlooks were among the key points highlighted at Fitch Ratings (Thailand) Limited's semi-annual investor briefing on China Credit Outlook and Investment in Asia-Pacific in Bangkok today.
Fitch's Head of Asia Pacific Sovereign Ratings, Mr. Stephen Schwartz, noted that the Chinese economy continues to slow from sluggish domestic demand and weakening business sentiment associated with the escalating US-China trade dispute. In response, policy settings have become more growth supportive. However, the extent of stimulus remains restrained compared to previous easing episodes, reflecting the authorities' concern about leverage and medium-term financial stability risks. Fitch forecasts Chinese GDP growth of 6.2% in 2019 and 6.0% in 2020, with downside risks from a further escalation in the trade war.
In his presentation on China's investment in the Asia-Pacific, Dr. Zhigang Li, Chairman of The Board of Directors of ICBC (Thai) Bank Public Limited Company, emphasised the importance of the Asia-Pacific in the global economy. He said the region accounts for about 60% of the world's population and for around 40% of world GDP. Economic growth in the Asia-Pacific, at an average of 5.5% per year over the past five years, is also faster than the world average.
Dr. Li said: "ICBC believes that in the near future, the sheer size of the economy of this region will make it the most influential economy in the world. China has for many years developed connectivity with the various countries in East Asia, Central Asia, South Asia and South East Asia. The objective of the Belt and Road Initiative, established in 2013, is mainly to serve as an infrastructure link or connectivity between China and the region through roads, railways, sea ports, energy routes and logistics in order to strengthen trade and investment activities among the partner countries, with an eventual aim to improve the standard of living of the people in this region."
Mr. Vincent Milton, Managing Director of Fitch Ratings (Thailand), said that the increasing economic importance of China is reflected in the substantial growth in Chinese trade and tourism with Thailand and the Asia-Pacific in the past decade. China now accounts for 16% of the trade value and 30% of the tourism revenue of Thailand. While China's investment in Thailand still significantly lags that of Japan and US, China's investment is expected to increase in the next decade due to large infrastructure projects as well as growth of private-sector investment, he told more than 100 corporate treasurers and bankers, insurers, asset managers, government and regulatory officials at the investor briefing.