S&P Global Ratings has lowered China’s debt rating on concerns over whether Beijing is moving fast enough to rein in credit growth.

The one-notch downgrade to A+ from AA- came even though the Chinese government earlier this year launched a “de-risking” drive after years of credit-fueled stimulus spurred by the need to meet official growth targets.

“Despite the fact that the government has shown greater resolve to implement the deleveraging policy, we continue to see overall credit in the corporate sector staying at a 9 percent point”, Kim Eng Tan, an S&P senior director of sovereign ratings, said in a conference call.

“We’ve now come to the conclusion that while we do expect some deleveraging in the next few years, this deleveraging is likely to be much more gradual than we thought could have been the case early this year,” he added.

China’s banks extended a record 12.65 trillion yuan ($1.84 trillion) of loans in 2016, roughly the size of Italy’s economy, while total social financing, a broad measure of credit and liquidity in the economy was a record 17.8 trillion yuan ($2.70 trillion). Both metrics are expected to set new records this year.

“One of the things that we do look for is more than just stabilization of financial risks, but actual decline or moderation in financial risks,” Tan said.

China’s S&P rating is now in line with those of Moody’s and Fitch. As a result, “the direct economic/market impact of [the downgrade] is low,” Stephen Gallo, European head of FX strategy at BMO Financial Group, told CNBC.

“Going forward, the outcome from the upcoming [Communist] party congress and the government’s commitments to further reforms will be the bigger drivers for both market sentiment and ratings agencies,” predicted Diana Kiluta Amoa, emerging market debt portfolio manager at JP Morgan Asset Management.

China’s finance ministry, meanwhile, said the downgrade ignored the economic fundamentals and development potential of the world’s second-largest economy.

“China is able to maintain the stability of its financial systems through cautious lending, improved government supervision and credit risk controls,” the ministry said.

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