S&P Global Ratings yesterday maintained its “A+/A-1” rating for the People’s Republic Of China, citing the Chinese government’s reform agenda, growth prospects and strong external metrics.
The outlook for China is “stable,” S&P said, which reflects the rating agency’s view that the naiton would maintain its GDP growth and improved fiscal performance for the next three to four years.
“Policy changes have helped to rein in credit growth and reduce the reliance of economic growth on public investment. If these trends continue, risks to Chinese economic and financial stability could moderate,” S&P said in a statement.
The rating agency said it might raise its rating for China if credit growth slows significantly and is kept below the current rates, but might downgrade if it sees a higher likelihood that China would allow higher credit growth.
S&P expects China’s economic growth to remain strong at close to 6 percent or more annually through at least to 2020.
“We also expect credit growth in China to be a little above that of nominal GDP over this period,” it said.
Last year, S&P downgraded China’s long-term sovereign credit rating, citing increasing risks from its rapid buildup of debt.
Meanwhile, in its Global Economic Outlook released yesterday, Fitch Ratings said that global GDP was lower than previously expected as trade tensions rise between China and the US.
Fitch cut its global growth forecast for next year by 0.1 percentage points to 3.1 percent, while it says this year’s GDP growth would rise to 3.3 percent from 3.2 percent last year, the report showed.
Additional reporting by staff writer
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