BEIJING - Dagong Global, a major Chinese credit rating agency, assessed the credit rating of China's banking industry as "stable" in its seventh banking credit rating report released Tuesday.

"Dagong made its assessment based on factors such as the financial strength and potential external support of domestic commercial banks," the agency said in a report.

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Of more than 20 Chinese banks, the agency raised the principal credit ratings of eight banks, including China Minsheng Banking Corp Ltd, Shenzhen Development Bank, Industrial Bank Co Ltd, Huaxia Bank, China Zheshang Bank, Bank of Jiangsu, Baoshang Bank and Bank of Chongqing.

The report said the overall financial strength of Chinese banks will continue to improve with the steady growth of Chinese economy, ongoing reform of the country's banking sector and improving risk-control capability of domestic banks.

It also warned of risks and challenges, such as the tightening monetary policies, rigid requirements for capital adequacy ratio and fierce market competition.