S&P affirms China's sovereign credit rating

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Standard & Poor's today affirmed China's sovereign credit rating, another sign that the world's second largest economy is rebounding as Beijing prepares to usher in new leaders.

The ratings agency said China's "exceptional growth prospects" and "modest government indebtedness" were key factors supporting its creditworthiness. It also said China's outlook was "stable".

China's "AA-" long-term and "A-1+" short-term sovereign credit ratings rank just below S&P's highest rating of triple-A.

S&P's credit analyst Kim Eng Tan said the upbeat assessment comes amid expectations of no major policy changes following the unveiling of new leaders at the Communist Party's pivotal congress earlier this month.

"We expect no major change in policy directions in China in the wake of the recent top leadership changes," he said. "Efforts toward deepening structural and fiscal reforms are likely to continue.

"We expect the Chinese economy to continue its strong growth while the country maintains its large external creditor position in the next three to five years."

China's economic growth hit a more than three-year low of 7.4 per cent in the third quarter this year, but recent data has fuelled optimism that its economy is rebounding.

China is set to install new Communist Party general secretary Xi Jinping as President in March, replacing incumbent Hu Jintao. While Li Keqiang is expected to replace current Premier Wen Jiabao.

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