Bangkok--19 Sep--Standard & Poor's Spectacular growth in revenue and profit is likely to slow down over the next 18 months for China's leading industrial players, according to a major report published today by Standard & Poor's Ratings Services. The report, titled "China's Top 200 Corporates", also warns that despite the powerful performances in the first half of 2007 and in 2006, a close eye will need to be kept on risks. "The Chinese economy looks immune to any negative developments or threats from the rest of the world, at this time. The economy simply runs over obstacles such as high oil prices, and liquidity and credit crunches, and powers ahead," said Standard & Poor's credit analyst Ryan Tsang. "But the markets could be lulled into underestimating and under-pricing risks during long periods of strong growth and high earnings. While we expect growth to remain healthy, we're aware of the challenges ahead for Chinese companies." These challenges include negative real interest rates, inflation, strong credit expansion, and the risk of a slowdown in the U.S. economy. Exporters will face particular pressure from increasing protectionism and scrutiny over product quality. Domestic consumption is, however, likely to become a more important economic driver. Strong revenue and profits are concentrated in a handful of sectors, headed by oil and gas. Total sales of the top 200 listed companies increased 25.5% year-on-year to Chinese renminbi (RMB) 5,961 billion in 2006, while aggregate earnings climbed 23.3% to RMB443 billion. Despite growing competitiveness, the report also shows that deeper restructuring is still needed. Five penetrating commentaries on the auto, energy, real estate, resources, and retail sectors suggest that consolidation will escalate over the next few years. But the articles warn that rapid expansion through excessive debt-funded acquisitions is putting the credit health of some companies at risk. Subscribers to RatingsDirect, the real-time web-based source for Standard & Poor's credit ratings, research, and risk analysis, can read the overview article, "China's Industrial Powerhouses Strengthen Profits As Economy Gathers Steam", as well as the individual sector commentaries, by using the search engine. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search. Media representatives may contact Michelle Lei at (8610) 6569-2961 or mailto:[email protected]. Media Contact: David Wargin, New York (1) 212-438-1579 [email protected] Analyst Contacts: Ping Chew, Singapore (65) 6239-6345 Ryan Tsang, CFA, Hong Kong (852) 2533-3532 Bei Fu, Hong Kong (852) 2533-3512 Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 8,500 employees, including wholly owned affiliates, located in 21 countries. Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com. Key Contacts: Americas Media Relations: (1) 212-438-6667 media_ [email protected] Americas Customer Service: (1) 212-438-7280 [email protected]