China overtook the US as the largest corporate debt issuer in 2013, according to credit rating agency Standard & Poor's Ratings Services.

Non-financial corporate debt in China reached $14.2tn (£8.4bn, €10.5bn) at the end of 2013, compared with $13.1tn in the US. The agency also expects the gap to widen in the next five years.

"The emergence of China as the biggest debt market, gradual disintermediation of banks, faster debt growth in sectors benefiting from the rising global middle class, and an ageing world population have resulted in major credit shifts in nonfinancial corporate debt issuance since the 2008 recession," S&P said.

"We expect that through the end of 2018, the debt needs of China, with its comparatively high nominal GDP growth, will reach $20tn--a full one-third of the almost $60tn in global refinancing and new debt needed," the agency added.

S&P said that the Chinese government's inclination to allow more government-related entities to issue debt securities could help deepen their capital markets.

It also noted Asia-Pacific debt issuers would make up half of the $60tn in projected new and refinancing demand over the next five years, and more than half the $72tn in projected debt outstanding in 2018.

By 2016, corporate debt in the Asia-Pacific region will exceed that of North America and Europe combined.

S&P, however, warned that some future financial stress could stem from Asia, as the credit quality of corporate borrowers in Asia-Pacific is generally lower than in North America and Europe.

There were concerns about China's financial system, which is suffering from high local government debt and increased shadow banking.

Earlier in 2014, China allowed a Shanghai-based solar-equipment maker to default on a bond traded in the mainland.

"We expect more defaults in the steel sector. An external spillover from this has been the more than 25% fall in iron ore prices this year," S&P said.