Business / Economy

Dagong maintains China's AA+ credit rating

(Xinhua) Updated: 2012-12-19 09:40

BEIJING - China's domestic rating agency Dagong Global Credit Rating Co Ltd announced Tuesday it would maintain the local currency credit rating of the country at AA+.

It also decided to maintain the foreign currency credit rating of China at AAA with a stable outlook, according to its report released Tuesday.

China's economy has turned onto the stage of comprehensive structural adjustments, with "clear growth prospects" in the mid- and long-term, Dagong said.

The agency said the financial risks following the country's large-scale credit expansion in 2009 have been gradually resolved.

In the short-term, China's macro-policies will focus on enhancing the quality of growth, and further digesting potential risks in the economy, the agency said.

It foresees GDP growth this year at 7.8 percent and 8.5 percent in 2013. As momentum continues to improve and the economic structure further optimizes, China's annualized growth rate for the 2011-2020 period will average at eight percent, the agency added.

The optimistic outlook came as a range of key economic indicators, including industrial output and manufacturing activities, pointed to a warming-up in China's growth, posting a 7.4-percent expansion in the third quarter, the weakest growth in more than three years.

And the country's repeated pledges of deeper reforms are widely expected to unleash more growth potential to the economy.

In a statement issued after the closure of a tone-setting central economic work conference over the weekend, Chinese authorities said "enhancing quality and efficiency of economic growth" will be a "central task."

Also in the report, Dagong said the slight climb of China's non-performing loan ratio will have a minor impact on the country's financial system.

It predicts the bad loan ratio of Chinese commercial banks will edge up to between one percent and two percent and then stabilize at that level.

Dagong said the banks' high bad loan provisions will cover the losses, while incurring little impact on their capital adequacy.

The agency also predicts the deficit ratio of governments at all levels will be 1.5 percent and their liabilities at 28.1 percent.


China's credit rating:

Dagong maintains Hong Kong's AAA credit rating

China urges rating agency to make 'accurate' assessment

Credit rating stays despite slowdown
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