China’s deleveraging campaign will create pockets of pain in markets over the coming year, without curtailing borrowing to the extent that debt actually declines, according to Pimco. Pimco predicts that Chinese companies will be able to refinance most of their borrowings in the next 12 months as the authorities refrain from carrying out broad-based deleveraging. This will contribute to debt expanding faster than nominal gross domestic product, said Luke Spajic, head of portfolio management for emerging Asia at Pimco, which manages $1.7 trillion. “The overarching issue is that we don’t envisage a drop in the debt stock,” Singapore-based Spajic said in a phone interview with Bloomberg. “So as long as China avoids a sharp economic slowdown over the next few years, then in all likelihood, this debt should all or in general be rolled over quite comfortably.” His views come amid a concentrated deleveraging campaign in the world’s second-largest economy, with officials signaling that the drive will deepen.