Standard & Poor’s lowered China’s credit rating today from AA- to A+, considering mounting risks deriving from fast accumulation of credit by the country.
This decision demonstrates agency’s assessment of a lengthy period of robust credit rise that has heightened China’s economic risks, S&P stated. The ratings prospects were firm though, it also said.
Earlier in May Moody’s has also made a decision to bring down China’s credit rating, as the government tries to cope with economic risks arising from an extensive period of stimulus based on credit which was invigorated by the set growth objectives.
It happens just a month before a Communist Party Congress of high importance that takes place two times in ten years where changes to major governmental positions will be decided.
Worries over China’s long-standing credit growth seem to be building up, although first 6 months of the year surpassed forecasts.
The news came on Thursday after the stock markets of China were closed and the response from yuan has not yet been evident.