Fitch: China Utilities Face Weak Demand Amidst High Capex

Fitch Ratings expects China's slower economic growth in 2016 to translate into weaker headline revenue growth for electricity and gas utilities in the country. At the same time, most utilities face high capex to add cleaner generation capacity. However, the overall rating and industry outlooks are stable.

We expect China's National Development and Reform Commission (NDRC) to continue to push ahead with regulatory reforms in the gas and electricity sectors to increase efficiencies and give more weightage to market forces. However, in the near term, we expect the NDRC to maintain significant control over prices.