China has rejected a move by Standard & Poor's to downgrade China's sovereign debt rating and described it as a wrong decision that ignores sound economic fundamentals and development prospects.
In a statement this morning, the Chinese Ministry of Finance said that the government is fully capable of maintaining financial stability if it continues to lend with prudent, strengthen supervision, and control credit risk.
China's sovereign rating cut yesterday was the first since 1999, adding that the decision was perplexing as the Chinese economy is on solid footing. It also affirmed that it can maintain reasonable credit growth as S&P ignored the characteristics of the country's financing structure.
The cut came in second place by major credit rating agencies this year after Moody's downgraded China's credit rating in May. This comes ahead of the congress of the ruling Communist Party, which is held twice every 10 years on October 18, and the top priority of this year's conference is to curb the risks of debt and ensure financial stability.
