September 24, 1999 
| | |
| ||
| September 24, 1999 | atimes.com | |
| ||
| China China's sovereign forex ratings lowered HONG KONG - International ratings agency Standard & Poor's has lowered the long-term foreign currency sovereign and senior unsecured ratings for China to BBB from BBB+. The short-term foreign currency rating was lowered to A-3 from A-2. The outlook on the long-term rating was changed to stable. Standard & Poor's said that it based the downgrade of the sovereign on lower growth prospects and rising fiscal costs of economic reforms. Predicted slower GDP growth in the coming years would exacerbate the financial strain on Chinese enterprises and deepen the losses of the state-owned commercial banks. Standard & Poor's predicted that rapid growth in bank lending could boost domestic credit beyond 120 percent of gross domestic product this year, compared with around 100 percent two years earlier. As a result, the contingent liability to the government from the banking sector is likely to rise within Standard & Poors' estimate of 40-80 percent of GDP. According to Standard & Poor's, China's small but growing private sector is unlikely to absorb the job losses from state-owned and collective enterprises in the near term. Hence, urban unemployment could exceed 10 percent this year, giving rise to social tensions obstructive to restructuring of the financial sector. The current ratings and stable outlook are supported by China's demonstrated commitment to economic reform, its promotion of the non-state sector, strong external liquidity and continuing steps to strengthen regulatory institutions, it said. (Asia Pulse) | |||||||||
 |
|
Front | China | Southeast Asia | Japan | Koreas | India/Pakistan | Central Asia/Russia | Oceania Business Briefs | Global Economy | Asian Crisis | Media/IT | Editorials | Letters | Search/Archive Cheap Holiday Packages to Saint Louis Missouri |
back to the top ©1999 Asia Times Online Co., Ltd. |
