Standard & Poor's today affirmed China's sovereign credit rating after warning 15 euro zone countries they faced possible downgrades, underscoring the strength of the world's second largest economy.
The ratings agency said China's "exceptional growth prospects" and "modest government indebtedness" were key factors supporting its creditworthiness and stable outlook.
"The stable rating outlook reflects that China can absorb potential balance sheet losses with little damage to its credit standing, given its substantial foreign exchange reserves and strong fiscal position," S&P said.
China's "AA-" long-term and "A-1+" short-term sovereign credit ratings rank just below S&P's highest rating of triple-A. The announcement came after S&P placed France, Germany and 13 other euro zone countries on a negative credit watch - a warning of a possible imminent cut in their sovereign credit ratings, which could increase their borrowing costs.
Despite S&P's upbeat assessment on China, there are growing concerns among top leaders and analysts that the Asian powerhouse is losing steam as demand for Chinese-made products weakens in crisis-hit Europe and the US.
The country's manufacturing sector contracted in November for the first time in 33 months, official data showed last week.
