Moody's cuts China credit outlook
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The news: Ratings agency Moody's has downgraded its outlook on China's A1 debt rating from "stable" to "negative" due to costs from bailing out local governments and a flailing property market.
Moody's said there were increased risks related to lower medium-term economic growth and the downsizing of the property sector.
The context: This was Moody's first change to rating China since downgrading it by one notch to A1 in 2017 when debt levels were rising.
While downgrading its outlook, Moody's reconfirmed China's A1 rating. The agency noted the world's second-biggest economy still had a high shock-absorption capacity.
Other major rating agencies S&P and Fitch both rate China A+, the equivalent of Moody's A1, and have stable outlooks.
What they said: "Moody's concerns about China's economic growth prospects, fiscal sustainability and other aspects are unnecessary," China's finance ministry said.
The source: Moody's
