Bangkok--27 Jul--Standard & Poor's Standard & Poor's Ratings Services today affirmed its 'A' long-term and 'A-1' short-term sovereign credit ratings on the People's Republic of China (China). The outlook was revised to positive from stable. At the same time, Standard & Poor's affirmed its 'A' long-term and 'A-1' short-term credit ratings on the Export-Import Bank of China (China EXIM). The outlook on the credit ratings on China EXIM was similarly revised to positive, in line with the sovereign ratings outlook revision. "China's reforms in the areas of bankruptcy, property, and labor laws in 2007 have motivated our revision of the ratings outlook to positive," said Standard & Poor's credit analyst Kim Eng Tan of the Sovereign Ratings group. "These reforms should underpin a high single-digit trend rate of growth in China and at the same time improve the productivity of investment, thereby reducing the risks of unduly large fluctuations in growth. In addition, although protectionist sentiment is rising among the Congressional leaders of China's largest trading partner, the U.S., we do not expect any enacted measures to materially disrupt trade volumes between the two nations." The ratings on China are supported by the sovereign's strong external asset position, exceptional economic growth potential, and the government's continuing improvement of its financial position. While the financial health of a number of China's large banks needs further improvement, we expect sustained efforts at financial reforms to reduce the associated risks markedly in the coming years. The key weakness in China's credit profile remains the inability of policy makers to rely predominantly on bottom-up market-oriented instruments for macroeconomic management. Instead, policy makers have preferred to manage the economy using top-down administrative measures. "The ratings on China could rise if its leadership embraces market-based policies more readily, or if the government strengthened public finances further," Mr. Tan concluded.Complete ratings information is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select Ratings in the left navigation bar, then Credit Ratings Search. Media Contact: Marc Eiger, New York (212) 438-1280 [email protected] Analyst Contacts: KimEng Tan, Singapore (65) 6239-6350 John Chambers, CFA, New York (1) 212-438-7344 Ping Chew, Singapore (65) 6239-6345