S&P Keeps China at A+; Sees 4% Growth on Fiscal Support

S&P Global Ratings has affirmed China's sovereign credit rating at 'A+' with a stable outlook, projecting that the economy will continue to expand by at least 4% over the next one to two years. The agency said its view is underpinned by expectations of sustained fiscal support from Beijing to maintain growth momentum.

In its assessment, S&P highlighted China's "strong progress" in supply chains, technological capabilities, and manufacturing strength, which have helped the economy withstand global headwinds, including trade tensions with the United States and the ongoing conflict in Iran.

However, the ratings agency also pointed to persistent weaknesses in domestic demand, citing a prolonged downturn in the property sector and subdued consumer spending as key drags. These factors, it noted, could temper the pace of recovery.

Separately, Fitch Ratings warned earlier this week that China risks slipping back into deflation unless domestic demand shows a more pronounced recovery, even though price pressures had shown some signs of improvement earlier in the year.