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Fitch maintains China's sovereign ratings

Staff Writer |
Fitch Ratings maintained the sovereign ratings of China at 'A+' with 'stable' outlook.

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The ratings reflect strength of China's external finances and macroeconomic track record. The near-term growth prospects remain favourable.

However, a further increase in economy's overall leverage in the context of continued adherence to ambitious GDP growth targets raises the potential for economic and financial shocks, the agency noted.

Fitch's said it will constrain growth prospects over the medium-term.

Tighter monetary conditions may lead to slower GDP growth, which in Fitch's baseline forecast will decelerate to 5.9% in 2018, from 6.5% in 2017.

Even after factoring in anticipated deceleration, China's five-year average annual growth rate of 6.7% will continue to exceed the 'A' category median of 3.0% by a wide margin, the agency said.

Public finances remain a neutral rating factor. Fitch forecasts general government gross debt of 48.3% at end-2017, broadly in line with the 'A' category median.

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