The New York-based rating agency S&P Global has affirmed the ‘A+/A-1’ credit rating on China, predicting that the country will maintain above-average gross domestic product (GDP) growth and improved fiscal performance.

“On September 30, 2019, S&P Global Ratings affirmed its unsolicited ‘A+’ long-term and ‘A-1’ short-term sovereign credit ratings on China. The outlook on the long-term ratings is stable,” the firm stated on its website.According to S&P, China will “maintain above-average headline GDP” with per capita growth forecast to stay above 5% annually. The agency also sees improved fiscal performance within the country over the next three to four years, as well as a decline in fiscal deficits.

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The firm warns, however, that China’s economic growth is likely to slow in the next few years due to the ongoing trade dispute with Washington.

“The economy is likely to face elevated uncertainties owing to US-China tensions and ongoing efforts to restructure the economy and reduce financial risks,” it warned. However, on the bright side S&P noted that “policy changes have helped to rein in credit growth and reduce the reliance of economic growth on public investment,” stating that if these trends continue, “risks to China’s economic and financial stability could moderate.”

Regarding US-China relations, the rating agency says it is unlikely that a major improvement will come in the near future.

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“We do not expect US-Chinese relations to normalize in the foreseeable future. This likely means that Chinese exports and manufacturing sector investment could see little growth over the next few years. US restrictions on technology transfers to China could also hinder productivity improvements. In this environment, China is more likely to maintain strong economic growth if the reform momentum picks up,” it states.

The two countries are preparing for yet another attempt to resolve their months-long trade dispute in talks set to be held in Washington on October 10.

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