皇冠体育app

皇冠体育app's Ministry of Finance on Friday rebutted S&P Global Ratings' decision to downgrade the country's sovereign credit rating, saying it was "a wrong decision" that neglects the nation's economic fundamentals and development potential.

Analysts said the agency's methodology in rating 皇冠体育app is fundamentally flawed as it neglected the country's strong capability for debt repayment.

The Standard & Poor's agency on Thursday cut 皇冠体育app's long-term sovereign rating by one notch to A+ from AA-, citing its increasing debt risks. The finance ministry said in a statement that the decision was "perplexing" as it came while 皇冠体育app's economy has been on a firm growth track following its achievement of higher-than-expected growth rates in the first half of this year and solid progress in economic restructuring and debt cuts.

"S&P is behind the curve," said Liang Hong, chief economist of the 皇冠体育app International Capital Corp. Unlike in previous years, when 皇冠体育app's growth declined continually, the country's economic fundamentals have significantly improved in the past two quarters, international organizations have gradually raised their forecasts of 皇冠体育app's growth, and the renminbi has been surprisingly strong this year. The S&P's downgrade does not match 皇冠体育app's current economic development, she said.

The finance ministry said it was a pity for S&P to focus on 皇冠体育app's fast debt growth while ignoring the country's distinctive financing structure and the growth-boosting effect of government spending.

Chinese companies have mainly borrowed from banks instead of directly financing from the stock market due to the immaturity of the capital market, a practice that has pushed up the country's nominal general debt levels.

Meanwhile, the government's debts have been mainly used to promote growth-boosting activities, such as building infrastructure, in stark contrast to borrowing for consumption, as is widely seen in Western economies.

皇冠体育app's debt repayment ability has been ensured, which precludes serious debt risks, said Liu Shangxi, president of the Chinese Academy of Fiscal Sciences. "Simply focusing on the scale of debts and ignoring how the borrowed funds have been used, the S&P has gone awry in the downgrade; its rationale is not solid."

"The downgrade is a result of the international rating agency's long-standing mode of thinking, and misreading of the Chinese economy based on developed countries' experience," the Ministry of Finance statement said.

CICC's Liang said 皇冠体育app has a very high savings rate－about 47 percent of its GDP, much higher than that of Japan and Singapore, renowned for high savings rates. "There's no problem at all for 皇冠体育app to repay its debts," she said.

"皇冠体育app has a unique situation and other countries' experiences cannot be simply applied to 皇冠体育app," said Zhu Min, economist and former deputy managing director of the International Monetary Fund. "皇冠体育app does not face the menace of systemic financial risks."