Moody’s Downgrades China Rating Citing Debt Concerns

Moody's Investors Service today downgraded China's long-term local currency and foreign currency issuer ratings toA1 from Aa3.

The rating agency said the downgrade "reflects Moody's expectation that China's financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows".

The rating agency said China's economy-wide debt levels were expected to increase further in the years ahead. It estimated the government debt burden would rise toward 40% of GDP by 2018.