Fitch warns of downgrades for China, Japan

[sharon sanders]

By Jonathan Standing
TAIPEI | Thu Sep 8, 2011 8:08am EDT

Fitch Ratings warned on Thursday that it might downgrade China's credit rating within two years as the country's banks struggle with debt loads following a lending surge to help lift the economy during the 2008 financial crisis.

more...

http://www.reuters.com/article/2011/09/08/us-fitch-idUSTRE7870WI20110908

 

[Laidback Al]

Re: Fitch warns of downgrades for China, Japan

From the link --

. . . Fitch's China long-term local currency rating is AA minus, its fourth highest level, on a par with Italy and a notch below Spain, Reuters data shows. . . .

Of course, with China holding up to 30% of US Treasuries, China could cash out of US Treasuries to recapitalize and prop up its own local currency. Even with a US rating of only AA+ from S&P, cashing out by China would lower the US rating and possibly bolster the capitalization and bond rating of China.