S&P cuts China's debt rating over 'financial risks'

standard and Poor cut China's FICO score today, warning that a delayed time of obligation development had raised "monetary and money related risks". S&P, which minimized China's obligation from AA-short to A or more, is the second significant FICO assessment organization to cut the Asian monster's evaluating after Moody's settled on a similar choice in May.

"The downgrade reflects our assessment that a prolonged period of strong credit growth has increased China's economic and financial risks," New York-based S&P said in a statement.While the credit growth has fueled China's economic expansion and high asset prices, "we believe it has also diminished financial stability to some extent", the agency said.

Debt-fuelled investment in infrastructure and real estate has underpinned China's growth for years, but Beijing has launched a crackdown amid fears of a potential financial crisis."The recent intensification of government efforts to rein in corporate leverage could stabilize the trend of financial risk in the medium term,"

S&P said."However, we foresee that credit growth in the next two to three years will remain at levels that will increase financial risks gradually."When Moody's downgraded China in May, it was the first time in almost three decades that the country's credit rating was cut. But another major credit ratings agency, Fitch, maintained its A-plus score for China in July. China posted better-than-expected second quarter growth as the economy expanded by 6.9 per cent, but analysts have warned that the momentum may not last.