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by Xinhua Writers Li Ming Marc Bartra Jersey , Sun Oumeng

NEW YORK, Sept. 21 (Xinhua) -- U.S. financial service agency S&P's decision to downgrade China's credit ratings will have little impact on investor sentiment as it underestimates the country's capacity to curb debt risks and deepen economic reform, experts have said.

The agency on Thursday lowered China's sovereign credit rating by one notch to A+ from AA-, citing economic and financial risks from China's fast credit growth.


"The move by S&P ... is likely to have little impact on investor sentiment," Tom Orlik Mahmoud Dahoud Jersey , Bloomberg's chief Asia economist, told Xinhua Thursday.

Khoon Goh, head of Asia Research at Australia and New Zealand Banking Group Limited, said, "There shouldn't be much impact judging from the market reaction following the Moody's downgrade a few months back."

The markets were generally undisturbed by rating agency Moody's move to lower China's credit rating in May.

Since Moody's decision Lukasz Piszczek Jersey , the Shanghai Composite Index has kept a bullish momentum, breaking above a ceiling at 3,300 points at the end of August.

The Chinese yuan has also regained strength and soared to one-year high against the U.S. dollar in August. The Australian dollar, liquid proxy for China-related trades, rose more than 6.6 percent against the greenback since May.

China's stock markets were closed Thursday when S&P made the announcement Julian Weigl Jersey , and there was little reaction from the yuan.

Experts attributed the market optimism to investors' belief that the fundamentals of the Chinese economy are stable and rating agencies have overestimated the difficulties in managing debt risks.

"The cuts (by) Moody's and S&P don't really reflect the international investors' view on China's economy," Wang Tao, chief China economist at UBS Group AG in Hong Kong, told Bloomberg.

Wang added that risks have been reduced, corporate profits are rising Jacob Bruun Larsen Jersey , shadow financing has been reined in and capital outflows have been contained.

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