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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