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在线翻译:
szdaily -> Opinion -> 
S&P’s China outlook flies in face of facts
    2016-04-04  08:53    Shenzhen Daily

    Zhang Zhengfu

    THE decision by rating agency Standard & Poor’s (S&P) to cut its outlook on China’s sovereign bonds from stable to negative flies in the face of facts and may mislead global investors.

    The downgrade reflects concerns over China’s economy in general, as the world’s second-largest economy is slowing amid a painful transition.

    However, it is not sufficient to justify an outright downgrade of its outlook. First and foremost, the fundamentals of the Chinese economy remain sound and solid, and are improving.

    It may be a coincidence that the announcement of S&P’s decision was followed by the release of a closely watched indicator showing China’s economic outlook is marching into “positive” territory.

    Activity in China’s vast manufacturing sector, measured by the PMI, grew for the first time in nine months in March, adding another hint of recovery, according to official data Friday.

    The S&P said the downgrade is based on its judgment that China’s economic rebalancing will likely proceed more slowly than expected, and economic and financial risks to the Chinese Government’s creditworthiness are “gradually increasing.”

    The figures speak for themselves. International institutions usually use two indicators to evaluate a country’s fiscal risks: its deficit should not exceed 3 percent of GDP, and the general government debt-to-GDP ratio should not exceed 60 percent.

    Official data showed that China’s fiscal deficit in 2015 accounted for 2.3 percent of its GDP. Estimates by international institutions put China’s government debt at about 40 percent of GDP, far below the 60-percent threshold.

    China can take the warnings as a reminder of the daunting challenges facing its economy, but if global investors follow the advice of the rating agencies and short China, they may suffer losses.

    (The author is a staff writer with Xinhua News Agency.)

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