Zhuji State-owned Assets Management Co., Ltd. 's (Zhuji SAMC) Ba1 ratings are based on the Zhuji government's Governmental Capacity to Support (GCS) score of baa3, and our assessment of how Zhuji SAMC's characteristics affect the Zhuji government's propensity to support, resulting in a one-notch downward adjustment from the GCS score.

Our assessment of Zhuji's GCS reflects Zhuji's status as a county-level city, one of the lower administrative levels in our assessment of the hierarchy of regional and local governments (RLGs) in China (A1 stable); its relatively high state-owned enterprise-related contingent liability risks; and its relatively high direct debt burden.

The Ba1 ratings also reflects the Zhuji government's propensity to support Zhuji SAMC, which is based on the Zhuji government's full ownership of Zhuji SAMC; the company's position as the largest local government financing vehicle (LGFV) and dominant provider of public services in Zhuji including shantytown renovation, resettlement housing construction, water services, public transportation and grain reserves, as well as executing most of the primary land and urban infrastructure development projects in Zhuji.

However, the one-notch downward adjustment from Zhuji's GCS score reflects Zhuji SAMC's commercial activities and the associated debts, notably in copper trading, which lowers the Zhuji government's propensity to support. The rating is also constrained by the contingent risk related to the sizeable amount of receivables due from other local government-related entities including those owned by lower-tier township governments.