-- China's banking sector has seen a significant decline in legacy nonperforming loans and structural shifts in its clientele base over years. -- We lowered our estimate of the incidence of gross problematic assets in a prolonged downturn despite pressures from the ongoing global economic downturn. -- We maintained our Banking Industry Country Risk Assessment on China's banking system in Group 6. -- The Chinese banking sector remains vulnerable to high corporate leverage, structural weakness in the production-driven growth model, government influence on lending, and the overall still-developing credit culture in China. HONG KONG (Standard&Poor's) Aug. 5, 2009--Standard&Poor's Ratings Services lowered its estimate of the incidence of gross problematic assets in the financial system of the
