Uncertainty in US trade tax policy tops credit risks In Asia: S&P

HONG KONG - The potential impact of the new US Administration's likely protectionist trade tax policies on Asia-Pacific exports, business activity, and issuer revenues has become the top credit risk for Asia-Pacific, according to S&P Global Ratings. It says the risk of the Trump Administration adopting a protectionist trade stance is “high and increasing”.

S&P Global Ratings credit analyst, Terry Chan says: "Potential import tariffs and an export tax regime from the US will weigh on trade and exports in the Asia-Pacific region."

Meanwhile, the ever-increasing debt level of China's companies and State-owned enterprises is intensifying risks because of weakening borrower credit quality, the ratings agency says.

A disorderly deleveraging of China's outsized and growing debt burden (particularly corporate) would undermine market confidence, loan performance, and asset and commodity prices.

On the other hand, S&P says, financing conditions have eased since a yield spike and currency volatility after the US Presidential election. However, the risk of capital outflows remains, pending the implementation of US trade policy.  www.sstandardandpoors.com (ATI).