Standard & Poor'saccustomed to downgrading – see the threat of a block downgrade of the ratings of 15 European countries – must have struggled to express a positive opinion on China. China's credit rating has been maintained at the level of AA- (the fourth highest rating, awarded a year ago) and the outlook remains stable.
The report cites exceptional growth prospects, huge foreign exchange reserve portfolios and low public debt. Meanwhile, the economic policy stance in China is slowly shifting from anti-inflation to pro-growth concerns. Monetary policy is easing, while exports have slowed to the slowest pace since exports started to grow again towards the end of the Great Recession in 2009.
Meanwhile, inflation has fallen to its lowest level in a year. The S&P report points out that, even if growth slows to 8% in the coming years (from previous double-digit rates), China has plenty of room to sustain development, given that public debt is more than modest, and is expected to decline further (thanks to the expansion of the denominator) to 10% of GDP in 2014.
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