State-owned enterprises in China will face pressure on their corporate ratings following S&P's decision to lower the country's overall credit rating.
The prediction, from Helena Huang, an economist at ICBC Standard Bank, said the pressure will affect the ability of Chinese corporates to raise offshore funding.
“The key uncertainty still rests in the longer term on Beijing’s capability to resolve its debt conundrum,” she added.
S&P's decision to move China's credit rating down one notch to A+ repeats the move made by Moody's, another ratings agency, in May. The downgrades reflect, “broad concerns over the expansion of China’s debt accumulation”, said Huang.
It is the first time since 2010 that S&P has changed its credit rating on China.
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