S&P misses mark on rating, analysts say

Standard & Poor's Global Ratings downgraded China's long-term sovereign credit rating by one notch on Thursday to A+ from AA-, citing risks due to an accumulation of debt, but analysts said the company has failed to thoroughly understand China's situation and exaggerated the risks it faces.

"The downgrade reflects our assessment that a prolonged period of strong credit growth has increased China's economic and financial risks," S&P said in a statement. "We foresee that credit growth in the next two to three years will remain at levels that will increase financial risks gradually."

The downgrade followed a similar credit cut by Moody's Investors Service in May. Analysts said that as China's economic growth stabilizes and its financial reform continues, it is resolving the financial risks caused by the growth of debt.