S&P, ADB warn on China growth

Standard & Poor’s Ratings Services released a report warning that if China doesn’t remove obstacles to productivity like price controls, government involvement in business and uncoordinated regulations, the country’s growth could be impaired in the coming decade, the Wall Street Journal reported. The agency also said that consistent economic growth could improve the country’s sovereign debt rating. China’s domestic industries are far less efficient than its export sector thanks to government meddling in the prices of electricity, oil and water, the report said; it also advised Beijing to allow consumers greater access to credit while calling for deeper structural reforms on pricing and the commercialization of state-owned enterprises. Meanwhile, the Asian Development Bank cut its growth forecast for China this year down to 9.3% from 9.6% and warned that failure to rebalance toward domestic consumption poses risks to China’s economic expansion.