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Dagong Global maintains China rating

12-05-2011 14:50 BJT

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China's domestic rating agency, Dagong Global, has announced it will maintain China's sovereign credit.

The local currency rating will remain AA+, and foreign currency is unchanged at AAA, with a stable outlook.

Dagong says the decision took into consideration risks related to the central government's ability to pay debt, and the medium and long-term development outlook.

The agency says the complexity of China's economic position is growing, due to inbound inflation and the financial crises of Europe and the U.S. But, it says China's economy remains fundamentally and structurally healthy, and it holds a positive outlook for development.

Guan Jianzhong, president of Dagong Global, said, "First, China has institutional insurance. Second, China has a growing economy, which comes from three aspects - huge market demand, a high savings ratio to ensure enough capital and most importantly, more productivity released by the economy's structural reforms. Besides, effective reform of the financial system is also essential. "

Dagong says all these factors will stimulate local governments' financial revenue to grow steadily, and guarantee a strong local currency debt-paying ability.

Meanwhile, the debt levels of China's central government and the country's private sector are both very low, making China's foreign currency debt-paying ability even higher than that of local currency's.

All of these taking into consideration, Dagong says its outlook on China's sovereign credit will remain stable over the next one to two years.

 

Editor:Liu Fang |Source: CNTV.CN

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