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The Standard & Poor's Rating Services said Friday that it sees no immediate need to revise the positive outlook on its sovereign ratings on China, as a soft landing is the more likely outcome for the country's high flying economy.
The sovereign ratings were last raised in February 2004, an upgrade that was intended to reflect greater resilience in the economy as a result of persistent progress in structural reforms, said the rating agency in a press release here.
The Chinese government's improving revenue base was also a reason for the rating action, it said.
In a commentary report published Friday, entitled "China Likely to Manage a Soft Landing," Standard & Poor's said it stands by those opinions.
"There is political consensus at the top that a more sustainable rate of growth will be beneficial for the economy in the long haul," said Standard & Poor's credit analyst Ping Chew, who heads the rating agency's sovereign rating team in Emerging Asia, on the sidelines of the 37th annual meeting of the Board of Governors of the Asian Development Bank in Jeju.
"In fact the government has been active since the middle of 2003 in sterilizing capital inflows, halting appreciation of the domestic currency, tightening the monetary environment, and limiting projects in selected industries," said Chew.
"The ongoing adjustments to slow investment growth will no doubt affect sentiment and the real economy, but the earlier moves initiated by the authorities bode well for preventing larger problems in the future," he added.
Standard & Poor's is a leader in providing widely recognized financial data, analytical research and investment and credit opinions to the global capital markets.
(Xinhua News Agency May 14, 2004)
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