Research Of Influential Factors For Sovereign Credit Of China

Sovereign credit has become an integral part of the national economy development. Sovereign credit has been influenced seriously after the eruption of financial crisis. Sovereign credit of many European countries has been degraded for many times recently, even United States, the most developed country in the world, experienced degradation of sovereign credit in2011. Conversely, sovereign credit was escalated for twice in2008and2010. The primary purpose of this essay is to explore the specific factors that influence our sovereign credit.With the reference of extant literature and real sovereign credit rating system of institutions and their problems, this essay firstly suggests the major factors of influencing sovereign credits of our country involved in politics, economic and financial factors. Moreover, politic, economic and financial factors are divided more specifically, into politic governing capacity, national security and policy efficiency; economic stock, economic efficiency and financial factors; domestic financial balance, international financial balance and foreign debt, respectively. Detailed data is introduced to indicate all indices.After establishing sovereign credit system for our country, major factor analysis method is utilized to present concrete marks for sovereign credit in our country and to categorize the factors more deeply in order to examine the correctness of former classification. Major factor analysis is useful for reduce dimensions and give marks, which could indicate the tendency our sovereign credit development and the factors influencing sovereign credit, so that we can analyze the problem more specifically.Finally, on the basis of theoretical and empirical analysis, we obtain the conclusion and policy suggestions. Economic factors influence sovereign credit more remarkably than fiscal and politic factors. Moreover, our country is supposed to maintain growth rate of economic development, including macroeconomic stock, economic efficiency factor and financial factor.