S&P: China’s ratings affirmed at 'A+/A-1'; outlook Stable

S&P Global Ratings affirmed China's ratings at A+/A-1 with a stable outlook, in its latest credit review report on the economy on Friday.

Key takeaways

China is likely to maintain above-average economic growth relative to other middle-income economies in the next few years.

China will maintain robust GDP growth and improve its fiscal performance over the next three to four years.

Expect China’s economic growth in 2021 to rebound from the low base of 2.3% in 2020.

China's strict border controls, rapid mass testing, and aggressive containment measures helped it to keep subsequent covid-19 waves localized.

Expect real GDP growth to come in at 8.3% this year, before moderating to about 5% from 2022-2024.

Believe China’s monetary policy is credible and effective, as demonstrated by the country's record of low inflation.

Market reaction

USD/CNY drops to four-day lows of 6.4530 on the above headlines, now trading at 6.4535, down 0.26% on the day.