China says S&P wrong to cut credit rating

BEIJING — China’s Finance Ministry on Friday criticized the cut in the Standard & Poor’s rating agency’s credit rating on Chinese government borrowing as a “wrong decision” and said it ignores the country’s economic strength.

S&P announced the change Thursday, citing rising debt it said increased financial risk. The move added to warnings China’s debt burden might drag on economic growth or threaten the financial system. It followed a similar downgrade by Moody’s Investors Service in May.

The timing is awkward for the ruling Communist Party, which wants to project an image of stability ahead of a twice-a-decade congress next month at which President Xi Jinping is set to be named to a second five-year term as leader.

S&P followed its China downgrade a day later by cutting its credit rating for Hong Kong, citing risks posed by their close ties. The agency said Friday that it was reducing its long-term rating on Hong Kong by one notch, to AA+ from AAA, reflecting potential spillover risks.

The Finance Ministry complained that S&P ignored China’s stable economic growth and reform efforts. It noted official data showed the economy grew by 6.9 percent in the first half of 2017 compared with a year earlier and government revenue rose by nearly 10 percent.

— The Associated Press