S&P Global has warned that a weak recovery in China could potentially lead to a downgrade in the country's credit rating. The global ratings agency highlighted concerns about the pace of China's economic recovery following the impact of the COVID-19 pandemic.
China, the world's second-largest economy, experienced a sharp slowdown in growth due to the pandemic, with GDP contracting by 6.8% in the first quarter of 2020. While the country has since shown signs of recovery, S&P Global cautioned that the pace of this recovery remains uncertain.
The ratings agency emphasized that a slower-than-expected recovery could put pressure on China's creditworthiness, potentially leading to a downgrade in its credit rating. This could have significant implications for China's ability to borrow money in international markets and could impact investor confidence in the country.
S&P Global's warning comes amid ongoing concerns about the resilience of China's economy and the effectiveness of its policy measures to support growth. The country has implemented various stimulus measures to boost economic activity, including infrastructure spending and monetary easing.
However, uncertainties remain regarding the sustainability of China's recovery, particularly in the face of global economic challenges such as trade tensions and the ongoing impact of the pandemic. S&P Global's assessment underscores the importance of continued vigilance and proactive policy action to support China's economic recovery.
