China Special: Why S&P has missed the mark with China downgrade

Rating went from AA- to A+

clock • 7 min read

China's credit rating was recently downgraded by Standard & Poor's (S&P) from AA- to A+ because of worries over the rapid growth of the country's debt.

Not surprisingly, China refuted concerns, with the country's Ministry of Finance (MOF) saying that "the downgrade is a result of [S&P's] long-standing mode of thinking, and misreading of the Chinese economy based on developed countries' experience".  Fidelity's Nicholls: Why I am excited about 'new China' What S&P ignored, the MOF said, is the country's distinctive financing structure, the wealth-creating effect of government spending and its support for growth, as well as sound development fundamentals and growth potential. But we must assess ourselves the two key components of cr...

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