China fell six places in a ranking of sovereign issuer risk because of a sharp increase in the country's debt, as measured by the International Monetary Fund (IMF).
In contrast, India rose six places to 36th, the biggest gain of any country in the index, because of optimism in its new leadership.
The dramatic leap in China's projected debt-to-GDP, from 15% to 45%, came because the IMF added local government debts to its estimates of China's total liabilities for the first time.
Responding to the new calculations, a research institute at asset manager BlackRock relegated China to 48th out of 50 in its index of sovereign issuer risk.
The BlackRock researchers made the decision even though the new debt level "would still leave China's gross debt-to-GDP ratio well below the current level of nations such as the US (105%), Japan (245%) and UK (92%)".
For India, researchers were enthused by a projected 0.9-point fall in the country's 12-month forward budget deficit, now forecast to be 4.3% of GDP.
"Reformist Prime Minister Narendra Modi and Reserve Bank of India chief Raghuram Rajan have sparked a wave of optimism on the Indian economy," says the BlackRock report. "Business confidence and growth are on an upswing, inflation is receding – and the currency has stabilised."
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