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China Chengxin announces China’s sovereign rating remains AAg+, with stable outlook

Beijing, 24 May 2017 – China Chengxin International Credit Rating reaffirmed AAA rating (local currency) and AA+ (foreign currency) on China with stable outlook.

Factors supporting the ratings are: (1) Although China’s economy is in the correction phase, yet it remains strong and as the second largest economy in the world, continues to play the driving role for the global economic growth; (2) low fiscal deficit ratio and debt ratio as compared with other major countries; (3) low foreign debt ratio, sustainable current account surplus with huge amount of foreign exchange reserves capable to meet external final obligation.

Reaffirmation of the ratings also take into considerations of (1) the pace and effectiveness of the economic structural reform; (2) impact of deleveraging on the economy in the short-term.

The foreign currency rating could be upgraded if the economic structural reform can be carried on smoothly and the potentiality of economic growth can be further unleashed; and deleverage can be done in a controllable manner, whereas the overall debt level of corporates can be lowered.

The foreign currency rating could be downgraded if the economic structural reform cannot be carried out according to plan; economy suddenly slowdowns or stagnates; government expenditures increase sharply that the fiscal deficit ratio and debt level increase substantially.