China is forecast to surpass the U.S. as the world's largest corporate debt market for non-financial companies in the next two years, according to a report from Standard & Poor's.

The rating agency expects the debt needs of companies in China to reach upwards of $18 trillion by the end of 2017, accounting for a third of the forecast $53 trillion in new debt and refinancing needs of global companies in the next five years. Debt includes bank loans and bonds and is drawn from public information collated by S&P.

"China is poised to overtake the U.S., and then the U.S. and euro zone combined," said Jayan Dhru, senior managing director at S&P.

Based on a stronger rate of economic growth that propels debt issuance, China's non-financial corporations could owe $13.8 trillion by the end of 2014, eclipsing U.S. corporations' outstanding debt of $13.7 trillion. A slower expansion of debt based on the growth of the economy would see China pass the U.S. in 2015, said S&P.

Globally, companies are seen refinancing $35 trillion of existing debt that consists of bonds and bank loans, with a further $15 trillion to $19 trillion in new money being raised by the end of 2017.

The vast majority of debt from Chinese companies at the moment is in the form of bank loans, but such vast future funding needs are expected to boost its corporate bond market.

"There is a significant financing need in China," said Mr. Dhru, who added that the sheer size meant there was an opportunity for China's corporate debt market to grow.

One area of concern is the outlook for China's economy after three decades of strong growth.

"Among a sample of 32 economies, China has the highest risk of an economic correction because of low investment productivity," said S&P, adding, that the country's rapid credit expansion in 2009-10 had generated a high ratio of private sector debt to the overall economy.

S&P also estimates that about 80 of the top 100 corporates in China are state-owned enterprises, and that its study shows "borrowers' financial risk profiles are, on average, relatively weak".

Much of the global demand for debt funding by non-financial companies during the next five years is expected to come from the Asia-Pacific region. S&P has lowered its estimates for issuance by companies in Europe and the UK.

"Over the next five years, we estimate that European corporate debt could fall to 20 percent of the global total, from 24 percent at the end of 2012. Notably, we project that China's corporate debt will likely be at least 50 percent above that of Europe by the end of 2017, despite being at a similar level today."