S&P sees no need for an out-of-schedule China rating review - RTRS

In a telephonic interview with Reuters, Kim Eng Tan, Standard and Poor’s (S&P) Asia-Pacific senior director of sovereign ratings noted that the ratings agency does not see any basis at this point for an out-of-schedule committee meeting on China’s ratings review.

Key Quotes:

"I don't think there has been anything that could justify the calling of an out-of-schedule committee at this point in time, so we are likely to follow our regular review pattern."

"Despite the (Moody's) downgrade, all the major agencies have really high ratings on China, whether it's A+ or AA-, they are both high ratings."

"The key concerns that people have are longer term."

"Because if trends carry on as they do, from what we have seen in the past few years, then at some point in time, the risk of instability will rise to a level that will probably justify a further downgrade in the ratings."

The key concern is that China "is relying on a source of growth which hasn't been sustainable in some other economies and also the fact its debt is rising fast."

"If one day growth slows and there's a whole pile of debt to be paid, then obviously the stresses are going to be large. But I don't think that day is anytime soon."