Chinese Debt rating increased

Standard & Poor (S&P) increased China’s debt ratings because the country’s foreign-exchange reserves increased to a record $1.8 trillion, as the world’s fastest-growing economy has not succumbed to the downturn in the US demand for exports as China improved both its fiscal and external position.

S&P credit analyst, Kim Eng Tan, said in a statement today that the improvements to the government balance sheet will mean that the country will have a buffer to any further downturn in the economy.

China’s currency has increased by 6.9 percent against the dollar this year in an attempt to tame inflation, which is stoked by the surge in food and energy costs.

The county’s long-term rating increased by one level to A+, which puts China on the same level as Italy.

The economy is expanding the fastest out of the world’s 20 biggest economies, although export growth has slowed to 21.9 percent in the first half of the year from 25.7 percent throughout 2007.

S&P also revealed that the ratings could be further increased if structural reforms lead to sustained improvements in the operational and financial performances of the main industries.

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