Beijing-based credit rating agency Dagong Global Credit Rating Co Ltd on Friday announced its decision to maintain its local and foreign currency sovereign credit ratings of China at AA and AAA respectively, both with stable outlooks, according to a document the company sent to the Global Times on Friday.
Dagong said it made the decision since China is "steadily moving forward with structural reform which reduces any downside risks to the country's economic outlook." It also stressed in the document that China's rising debt burden have been "managed at reasonable levels".
In the document, Dagong said the Chinese government retains its robust local and foreign currency solvency for several reasons.
First, in the medium term, stable progress to push forward structural reform, as implemented by the Chinese government, will gradually help resolve the development bottleneck and thus guarantee sustainable economic development.
Second, with a prudent and neutral monetary policy, the banking sector's risk of asset quality is under control, and asset bubbles will be contained, rendering the credit environment stable.
Third, in the short term, China's economy will continue to slow down and stabilize, and the country's structural reform will achieve initial success while continuing to deepen. Economic growth will maintain a relatively high momentum in the medium to long term.
Fourth, in the short term, although China's general government fiscal deficit will increase, this increase is manageable. China's general government debt burden will remain in a reasonable range over the medium term.
And last, China's foreign debt scale is very low. Its current account surplus, large foreign assets, and the internationalization of the RMB will ensure its strong foreign solvency.