S&P on China: Prolonged period of strong credit growth has increased eco & financial risks

Reuters out with the full report from the US ratings agency, Standard and Poor’s, on China’s sovereign ratings downgrade.

Key Points:

Long term sovereign credit ratings lowered to "A+" vs "AA-"

Prolonged period of strong credit growth has increased economic and financial risks

"Stable" outlook reflects view that China will maintain robust economic performance and improved fiscal performance in next 3-4 years

Sees credit growth in next 2-3 years to remain at levels that will increase risks gradually

Expect China's per capita real GDP growth to stay above 4% annually, even as public investment growth slows further

Recent intensification of Chinese Govt efforts to reign in corporate leverage could stabilize trend of financial risk in medium term