S&P Raises China's Long-Term Ratings
SINGAPORE (
) -- Standard & Poor's raised its long-term foreign and local currency sovereign credit ratings on China to 'AA-' from 'A+'.
S&P said Thursday the outlook on the long-term ratings is stable.
"The upgrade reflects a positive revision in Standard & Poor's assessment of the risks to China's macroeconomic and financial stability," said Standard & Poor's credit analyst Kim Eng Tan, in a statement. "We believe the Chinese authorities would respond to future threats to financial stability with timely measures, based on our observations over the past two years."
S&P said the stable rating outlook reflects its view that China "can absorb potential balance sheet losses with little damage to its credit standing, given its substantial foreign exchange reserves and strong fiscal position."
S&P said the sovereign credit ratings reflect the Chinese government's modest debt, strong external asset position, and the economy's exceptional growth prospects. These strengths, S&P said, "outweigh sizable contingent liabilities in the banking system."
-- Written by Joseph Woelfel
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