China’s recent measures to support the economy signal a shift away from the previous singular focus on addressing financial risks but easing will likely stop short of the type of credit stimulus that could aggravate economic imbalances.
Key points (Source: Reuters)
Downward pressure on the rating could emerge over time if we were to assess that a reversal of policy settings could result in a further build-up of the economy’s vulnerabilities.
The authorities appear eager to avoid another large-scale stimulus.
Policy easing is only at a nascent stage, and we last affirmed China’s ‘A+’/Stable sovereign rating in March 2018.
The policy stance is among the key sensitivities that we will continue to monitor.
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