Should the trade impasse linger on, the damages could become greater and start having some deeper impacts.
Escalations in its trade dispute with the U. S. not only could dent China’s economy but also impact its credit standing, according to ratings agencies.
China’s credit remains strong despite a weakening economy and a high-stakes tariff battle it is engaged in with the U. S. However, should the impasse linger on, the damages could become greater and start having some deeper impacts.
« The tariff war is negative for China especially at a time when its policy makers are battling problems of rising debt and increasing leverage in its economy, » analysts at ratings agency DBRS said in a note. « The economic impact on China of rising tariffs would be broader than just via its trade with the U. S. »
An accompanying release said the impact of more central bank intervention could impact « the future of [China’s] public debt ratio and China’s rating. »
DBRS is the fourth-largest ratings agency in the world.
The firm has China rated « A, » which is its third-highest classification.
