Moody’s cuts China credit outlook to negative on rising debt

• Moody’s lowered its outlook to negative from stable while retaining a long-term rating of A1 on the nation’s sovereign bonds.
• China’s usage of fiscal stimulus to support local governments and its spiralling property downturn is posing risks to the nation’s economy, the credit ratings agency said.
• Beijing pushed back soon after the outlook change was announced, saying it was “disappointed” with Moody’s decision and the nation’s economy “will be highly resilient and has large potential”.
• The impact of the property downturn is well under control, the Finance Ministry said in a statement.
• Moody’s last cut its credit rating on China in 2017, to A1 from Aa3, on the likelihood of a material rise in economy-wide debt and the impact that would have on state finances. That was its first China debt downgrade since 1989.

External Link : https://www.straitstimes.com/business/moody-s-cuts-china-credit-outlook-to-negative-on-rising-debt