China decries S&P negative credit rating

Peeved over S&P's move to cut its credit rating to negative, China today called for an "objective assessment" of world's second largest economy as its GDP rose by USD 740 billion last year, equivalent to the GDP of Saudi Arabia.
"Last year, China's economy grew by 6.9 per cent, an increase of USD 740 billion equal to GDP of Saudi Arabia," Chinese Foreign Ministry spokesman Hong Lei told a media briefing here today reacting to Standard & Poor's move.
China's overall GDP last year was stated to be around USD 10.7 trillion.
The rating agency S&P has cut the outlook for China's credit rating to negative from stable, saying the nation's economic rebalancing is likely to proceed more slowly than it had expected.

China fixed the growth target this year at 6.5 per cent to 7, while IMF, World Bank and ADB forecast far lower growth not simply for this year but the next two years.
China's credit rating is AA- with a negative outlook, S&P said in a statement, which also affirmed the long-term and A-1+ short-term sovereign credit ratings.

"We revised the outlook to reflect our expectation that the economic and financial risks to the Chinese government's creditworthiness are gradually increasing," S&P said in a statement.
"This follows from our belief that, over the next five years, China will show modest progress in economic rebalancing and credit growth deceleration," it said.

Reacting to this Hong said at present, China's economy is under a "new normal".
It is being restructured and upgraded and the fundamentals of China's economy which point to a long-term sound performance have not changed, he said, adding that China still served as an important driving engine for the world economic growth.
Meanwhile, economic restructuring has made substantial progress.
Consumption-led growth exceeded investment-driven growth, accounting for 66.4 per cent of the economic increase, he said.
The service sector contributed more than half of the GDP and all these factors show that the quality of China's economic growth is improving, he said.

"We hope that the relevant agency can have comprehensive understanding of Chinese realities and give objective conclusion," Hong said.