First time visitor? Learn more.
  • No content found in .

  • S&P Downgrades China

    by coldwarrior ( 90 Comments › )
    Filed under China, Economy, Open thread at September 21st, 2017 - 6:31 am

    This is long overdue:

    S&P Global Ratings cut China’s sovereign credit rating for the first time since 1999, citing the risks from soaring debt, and revised its outlook to stable from negative.

     The sovereign rating was cut by one step, to A+ from AA-, the agency said in a statement late Thursday. The analysts also lowered their rating on three foreign banks that primarily operate in China, saying HSBC China, Hang Seng China and DBS Bank China Ltd. are unlikely to avoid default should the nation default on its sovereign debt.
     “China’s prolonged period of strong credit growth has increased its economic and financial risks,” S&P said. “Although this credit growth had contributed to strong real GDP growth and higher asset prices, we believe it has also diminished financial stability to some extent.”
     The downgrade, the second by a major ratings company this year, represents ebbing international confidence China can strike a balance between maintaining economic growth and cleaning up its financial sector. The move may also be uncomfortable for Communist Party officials, who are just weeks away from their twice-a-decade leadership reshuffle.
    The cut will “have a relatively big impact on Chinese enterprises since corporate ratings can’t be higher than the sovereign rating,” said Xia Le, an economist at Banco Bilbao Vizcaya Argentaria SA in Hong Kong. “It will affect corporate financing.”

    Moody’s Investors Service cut its rating on the world’s second-biggest economy to A1 from Aa3 in May, citing similar concerns over economy-wide debt and effects on state finances.

    Comments

    Comments and respectful debate are both welcome and encouraged.

    Comments are the sole opinion of the comment writer, just as each thread posted is the sole opinion or post idea of the administrator that posted it or of the readers that have written guest posts for the Blogmocracy.

    Obscene, abusive, or annoying remarks may be deleted or moved to spam for admin review, but the fact that particular comments remain on the site in no way constitutes an endorsement of their content by any other commenter or the admins of this Blogmocracy.

    We're not easily offended and don't want people to think they have to walk on eggshells around here (like at another place that shall remain nameless) but of course, there is a limit to everything.

    Play nice!

    Comments are closed.

    Back to the Top

    The Blogmocracy

    website design was Built By All of Us