S&P affirms China ratings at 'A+/A-1'with outlook stable

June 30, 2021

HONG KONG - China is likely to maintain above-average economic growth relative to other middle-income economies in the next few years, partly due to its effective containment of the COVID-19 pandemic and rapid vaccine rollout, according to ratings agency Standard and Poors.

S&P says China's fiscal position deteriorated in 2020 as anti-pandemic bonds and large local government issuances added to government debt.

"With the economy on the mend and a smaller projected deficit, we expect the debt ratio to stabilise over the next two years," it says.

"We affirm our 'A+' long-term and 'A-1' short-term sovereign credit ratings on China."

S&P says the stable outlook reflects its view that China will maintain robust GDP growth and improve its fiscal performance over the next three to four years, despite headwinds from unpredictable pandemic developments and geopolitical risks.

It says it weighs China's strengths against certain credit factors "that are weaker than what is typical for similar rated peers".

"For example, China has lower average income, less transparency, and a more restricted flow of information."

www.standardandpoors.com (ATI).