Moody's downgrades China sovereign credit outlook to negative

Retains A1 rating

clock • 2 min read

Credit ratings agency Moody’s has downgraded its outlook for Chinese government credit from stable to negative, citing “broad downside risks to China’s fiscal, economic and institutional strength”.

The agency said today (5 December), that a variety of factors, including persistently lower medium-term economic growth and the ongoing downsizing of the property sector, meant it would be downgrading the country's outlook. These economic problems will likely lead to greater government intervention in the economy, it said, as regional and local governments face lower revenue from land sale taxes and therefore are unable to properly invest in state-owned enterprises. Moody's said China's central government will be pushed to provide financial support to local governments and state-owned...

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