S&P says downgraded China as credit growth still too fast

Reuters ^ | 2017/09/22 | Elias Glenn, Yawen Chen

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S&P says downgraded China as credit growth still too fast

BEIJING (Reuters) - China’s attempts to reduce risks from its rapid buildup in debt are not working as quickly as expected and credit growth is still too fast, S&P Global Ratings said on Friday, a day after it downgraded the country’s sovereign credit rating.

While S&P warned in June that a cut may be on the cards, it said it decided to make the call after concluding that China’s “de-risking” drive that started early this year was having less of an impact on credit growth than initially expected.

“Despite the fact that the government has shown greater resolve to implement the deleveraging policy, we continue to see overall credit in the corporate sector to stay at a 9 percent point,” Kim Eng Tan, an S&P senior director of sovereign ratings, said in a conference call to discuss the one-notch downgrade to A+ from AA-.

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For a comprehensive overview of China's financial problems:

China's debt problem explained. - Graphics - Thomson Reuters

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