PRIVATE companies in China have defaulted at a record rate this year and could face similar pressures in 2020, rating agency Fitch said Tuesday, highlighting significant corporate debt risks as economic growth slows.

A record high of 4.9 percent of China’s privately owned issuers defaulted on onshore bond payments in the first 11 months of 2019, Fitch said in a statement, up from 0.6 percent of private issuers in 2014.

Privately owned enterprises (POEs) accounted for more than 80 percent of bond defaults, whether counting by the number of issuers or the principal amount of defaulted bonds, Fitch said.

Jenny Huang, director of China corporate research at Fitch Ratings, said at a briefing that she expects the POE default rate “to stay at around this record level in 2020.”

Wang Ying, head of APAC energy and utilities at Fitch, said that although general market liquidity conditions were relatively loose this year thanks to central bank support, banks remained cautious toward some private companies.

“Many private sector companies, the majority of those who are listed on the A share markets, basically can’t repay their debt with the cash flow from operations. So they all need to refinance,” she said. (SD-Agencies)