Fitch affirms China's rating at 'A+' with stable outlook

By Ovunc Kutlu

ANKARA (AA) - China's long-term foreign currency rating was affirmed at 'A+' with a stable outlook, the global ratings agency Fitch Ratings announced Thursday.

The agency said the world's second-largest economy's ratings are supported by robust external finances and its resilient macroeconomic performance.

Although the outbreak of the coronavirus' omicron variant appears to be largely contained, monthly activity has fallen to the lowest level since early 2020 and the property sector remains weak, the agency said in a statement.

"Covid-19 control measures adopted to curb an outbreak of the omicron variant have led to widespread mobility disruptions since mid-March, including an extended lockdown of the commercial hub of Shanghai," it added.

China's rating, however, is constrained by fiscal and macro-financial stability risks associated with the country's highly indebted non-government sector, it said.

A continued rise in macro-financial risks, failure to maintain credit growth and increase in government debt/GDP ratio are factors that could lead to a negative rating action, the agency warned.

Fitch said it estimates the Chinese economy to expand by 4.3% this year, from 8.1% in 2021, due to the "cautious pace" restrictions have been eased.