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China Ratings Affirmed At 'AA-/A-1+'; Outlook Stable

Research Update by Standard & Poor's Financial Services LLC.

Overview :
· China's robust growth prospects, strong net external asset position, and modest government indebtedness are key supporting factors for the government's creditworthiness.
· These strengths offset weaknesses related to China's low middle-income economy, restricted information flows, and continued reliance on direct administrative tools to manage the economy.
· We are affirming our sovereign credit rating on China at 'AA-/A-1+'. In line with this, we are affirming our Greater China regional scale rating at 'cnAAA/cnA-1+'.
· The stable outlook on the global scale long-term rating reflects our view that economic and political developments in the next two to three years are likely to support the rating.

Rating Action
On Nov. 29, 2013, Standard & Poor's Ratings Services affirmed the 'AA-' long-term and 'A-1+' short-term sovereign credit rating on the People's Republic of China. The outlook on the long-term rating is stable. In line with this, we are affirming our Greater China regional scale rating at 'cnAAA/cnA-1+'. Our transfer and convertibility (T&C) assessment is 'AA-'.

The ratings on China reflect the country's strong economic growth potential, robust external position, and the government's relatively healthy fiscal position. We weigh these strengths against credit factors that are weaker than normally seen in similarly rated peers. These include China's lower average income, lesser transparency, and more restricted information flows. An economic policy framework that is still evolving to suit its largely market-based economy is yet another sovereign credit weakness for China.
Efforts toward deepening structural and fiscal reforms are likely to continue, given the government's recent policy announcements. While growth could decelerate from the historical trend rate, we expect the Chinese economy to continue to perform relatively strongly and maintain its large external creditor position.
We project per capita real GDP growth in 2013-2016 at 6.7%, less than the 8.6% average rate of the previous five years. We expect China's high domestic...

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Mercredi 4 Décembre 2013