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Chinese private corporate spending won't recover in 2012
But Morgan Stanley anticipates re-acceleration next year when government stimulus kicks in.
It added that it sees little reason to fear aggressive credit supply in China.
"Just as in the region as a whole, slowing growth and demand has left capacity utilisation low in China (see Exhibit 12). In our view, that suggests that even if demand growth does recover (our economics team expects growth to begin to reaccelerate in 1Q13, driven by stimulus), private corporate spending will most likely only recover with a lag. Therefore, issuance from China should remain more muted than in 2010-11," Morgan Stanley said in its latest Asian Credit Strategy report.
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