Fitch has downgraded the outlook on China’s debt as it warned of increased risks to the economy while the country moves away from its reliance on growth from the property sector. On Wednesday the US-based agency said it had revised China’s sovereign credit rating from stable to negative, saying this reflected the “increasing risks to China’s public finance outlook” as the country “contends with more uncertain economic prospects”. The downgrade comes amid a prolonged crisis in the country’s property sector that has been running since 2021, when a regulatory crackdown…
Tag: Rating agencies
China’s many systemic problems dominate its outlook for 2024 | George Magnus
There were contrasting reactions when the US rating agency Moody’s downgraded China’s A1 credit rating outlook from stable to negative last month. Financial markets, focused on the economy, paid it barely any attention. Chinese state media, looking at the politics, saw red. Global Times called it “biased and unprofessional”. A few days later, the Ministry of State Security issued a statement stipulating that the only purpose of “negative talk” was to doubt or deny China’s socialist system, and to contain its development. The Chinese Communist party’s prickly attitude to criticism…
Moody’s cuts China credit outlook to negative as economy slows
China’s ability to repay its government borrowing has been downgraded by the credit rating agency Moody’s, which said the ripple effects from a crisis in the property sector would undermine efforts to revive its flagging economy. Moody’s warned that Beijing would need to bail out local and regional governments and state-owned enterprises that were struggling with rising debts, hampering efforts to boost investment and growth. The rating agency downgraded its outlook for Chinese sovereign bonds from stable to negative on Tuesday, sending a signal to potential lenders that the risk…