U.S. financial service agency S&P lowered Chinas sovereign credit rating from AAto A+ on September 21， citing economic and financial risks from Chinas fast credit growth.

Tom Orlik， Bloombergs chief Asia economist， told Xinhua News Agency that the move by S&P is likely to have little impact on investor sentiment.

Khoon Goh， head of Asia Research at Australia and New Zealand Banking Group Ltd.， said that there shouldnt be much impact judging from the market reaction following the Moodys downgrade a few months back.

The markets were generally undisturbed by rating agency Moodys move to lower Chinas credit rating in May. Since Moodys decision， the Shanghai Composite Index has maintained bullish momentum， breaking above a ceiling of 3，300 points at the end of August.

The Chinese yuan has also regained strength， soaring to a one-year high against the U.S. dollar in August.

Experts believe that Chinas debt risks are manageable， given the nations fi scal fi repower， minimal foreign debt and abundant foreign reserves.

Brad Setser， senior fellow at the Council on Foreign Relations， a U.S. non-profit think tank， said it is important to recognize that Chinas external balance sheet remains strong.

Chinas $3 trillion in foreign reserves easily covers all of the external borrowing of Chinas government， banks and firms， Setser told Xinhua， adding that the total government debt is modest for an economy that saves as much as China.

In past years， China has adopted a range of measures to manage debt risks， including building an early warning mechanism and a debt supervision system， and completing local government bond swaps.

The latest regulatory upgrades include the introduction of a new committee on financial stability and development， announced during the two-day National Financial Work Conference in July.

The conference showed Chinese leaderscommitment to the deleveraging agenda， which is defi nitely a positive development， Orlik said.

Rather than adopting large-scale stimulus， China has been intensifying efforts to shift the engine of economic growth toward consumption， services and innovation. Analysts said such structural reforms could help reduce the nations debt risks systematically in the long run.

Paul Sheard， executive vice president and chief economist of S&P Global， recently told Xinhua that Chinas credit-fueled infrastructure and residential housing investment in the past decade led to a build-up of debt and credit in the economy， which is why economic reforms are critical.endprint

Sheard said its important that institutional and market-enhancing reforms that create the right incentives for capital to be allocated effi ciently continue to be implemented.

Reforms should also continue to further the necessary rebalancing of the economy from excessive reliance on investment to household consumption as the key driver of economic growth and rising living standards.

Chinas economy expanded 6.9 percent in the fi rst half of this year， with consumption， services and new， innovation-driven economic sectors taking up larger roles. According to data from the National Bureau of Statistics， consumer expenditure contributed 63.4 percent to GDP growth in the fi rst half and the services industry accounted for 54.1 percent of the GDP， 14 percentage points higher than the manufacturing industry.

In July， the International Monetary Fund （IMF） revised upward its growth forecasts for China this year and in 2018 to 6.7 percent and 6.4 percent respectively.

The IMF said the updates refl ected a solid fi rst quarter for Chinas economy， underpinned partially by supply-side reforms.endprint