Fitch IBCA, the international rating agency (FI), Monday affirmed its long-term and short-term foreign currency ratings of China at "A-" and "F1" respectively.

These ratings apply to all senior, unsecured sovereign debt issues and set a ceiling for Fitch IBCA rated entities in China.

Fitch IBCA comments that China's sovereign rating encompasses an extraordinary mixture of external strengths and domestic weaknesses.

The former have enabled China to surmount the Asian financial crisis with comparatively little collateral damage. However, the regional crisis has also alerted China to the dangers that lie ahead if it does not address the structural weaknesses inherent in the country's state-owned enterprises (SOEs) and banks.

The agency believes that hard-fought negotiations to join the WTO indicate that China recognizes the dangers and is preparing to tackle them sooner or later.