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China's credit rating downgraded by S&P

Standard & Poor's
Asia   Economic and financial risks

China's credit rating has been downgraded by Standard & Poor's (S&P) because of worries over the rapid buildup of debt in the country.


S&P cut China's rating by one notch from AA- to A+, saying its debts had raised “economic and financial risks”.

The International Monetary Fund warned in August that China's credit growth was on a “dangerous trajectory”. S&P's move puts its rating for China on a par with the two other major credit rating agencies, Moody's and Fitch.

This government has a growth target of 6.5% for 2017, although the economy grew at an annual rate of 6.9% in the second quarter of the year. One engine of growth has been investment in infrastructure and property by corporations and local authorities.

S&P said in a statement: “The downgrade reflects our assessment that a prolonged period of strong credit growth has increased China's economic and financial risks.”

 

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