CROSS-SECTORSECTOR COMMENT 14 March 2016ContactsMarie Lam 852-3758-1379Associate Managing Director marie.lam@moodys.comGeorgina Lee 852-3758-1560AVP-Research Writer georgina.lee@moodys.comSecuritization - Asia PacificNegative Impact from China Slowdown on Asia Securitization Will Vary by Country, But Will Be Generally Limited Summary Chinas economic slowdown will be negative for the performance of assets backing the country's auto loan asset-backed securities (ABS).The slowdown will also spill over into other Asia Pacific economies, but the impact on assets backing structured finance transactions in those markets will depend on the extent that individual countries are exposed to China.In Australia, China's slowdown will have a moderately negative impact on ABS and to a lesser extent, residential mortgage backed securities (RMBS). In Japan, the impact will be very minimal and strong labor market conditions will support the performance of assets backing ABS and RMBS. In the Indian securitization market, there will be only a negligible impact. In fact, we expect the Indian economy to grow around 7.5% in 2016, supporting the assets backing auto ABS.Our forecasts for China's GDP growth are at 6.3% in 2016 and 6.1% in 2017, down from the 6.9% reported for 2015.The discussion on the four Asian securitization markets in this report is based on the data from asset classes where Moody's has rated transactions outstanding. Additionally, for each market we only cover asset classes in which the China slowdown is directly relevant to their credit quality or performance, whether the impact is positive or negative. This report does not intend to cover the entire Asia Pacific securitization market. For more comprehensive information on the outlook for Asian markets, refer to our series of 2016 outlooks listed in the Moody's Related Research section.China growth to slow in 2016 and 2017 Chinas headline GDP growth slowed to 6.9% in 2015 from 7.3% in 2014 and 7.7% in 2013. We also forecast a downward trend in 2016 and 2017, with the pace of growth slowing to 6.3% and 6.1% respectively. This forecast assumes that the Chinese authorities will further step up monetary and fiscal measures to achieve the government's economic growth target of at least 6.5% this year.However, such policy support may also have the effect of slowing the implementation of planned reforms, including those related to state-owned enterprises (SOEs). On 2 MarchMOODY'S INVESTORS SERVICE CROSS-SECTORThis publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.2 14 March 2016 Securitization - Asia Pacific: Negative Impact from China Slowdown on Asia Securitization Will Vary by Country, But Will Be Generally Limited2016 Moody's changed the outlook on the Chinese government's ...
