STORY: Moody’s cut its outlook on China’s government credit ratings on Tuesday (December 5).
The ratings agency downgraded it from stable to negative.
It reflects global worries about China’s economy.
Moody’s said it sees growing evidence Chinese authorities will need to give more financial support for debt-laden local governments and state firms.
That in turn, the agency says, risks China’s fiscal, economic and institutional strength.
It also cited an ongoing crisis in the country’s property sector, where giants like Evergrande have huge liabilities.
After the statement, a source said China’s major state-owned banks stepped up dollar selling.
The move by Moody’s was the first change of its China view since it cut its rating by one notch six years ago.
The agency said it expects the country’s annual GDP growth to slow to 4.0% next year and in 2025.
It also expects growth to average 3.8% from 2026 to the start of the next decade.
China’s Finance Ministry said it was disappointed by Moody’s decision.
It further said the economy will keep its rebound and positive trend, and property and local government risks are controllable.