China's Credit Rating Cut by S&P but Stocks Don't React

Stocks dismiss worries about China's debt levels.
Author:
Publish date:

Rating agency S&P lowered China's sovereign credit rating Thursday - something they haven't done in almost two decades.

The rating was reduced by just one notch to A+ from AA-.

The reason? Increasing debt.

China's debt as a percentage of GDP stood at 260% at the end of 2016, compared to 240% at the end of 2015, according to Bloomberg data.

Stocks in China didn't react much to the news, but worries about China, now the world's second largest economy, have sparked market volatility in recent years.

You may remember the first week of January 2016 - stocks had their worst start to a New Year ever, with the S&P 500 falling 4.5% that week, amid fears of a slowing China economy.

More From TheStreet:

  • Here's Why the S&P 500 Could Be Headed to 2,700 By Year's End
  • This Is Why the Federal Reserve Sent the S&P 500 Lower on Wednesday
  • Jim Cramer on Equifax, Wells Fargo, Federal Reserve, FedEx, Adobe and Toshiba
  • You Can Become a Millionaire Even if You Make $35,000 a Year