Moody’s Cuts China Credit Rating
Moody’s cuts its rating on China’s debt for the first time since 1989 in a challenge to the view that the nation’s leadership will be able to rein in debt while maintaining the pace of economic growth. Moody’s has reduced the rating to A1 from Aa3 and has indicated the likelihood of a “material rise” in economy wide debt.
“According to Bloomberg Intelligence, the total outstanding credit of China is now about 260% of GDP by the end of 2016, compared to 160% in 2008.”
According to Bloomberg Intelligence, the total outstanding credit of China is now about 260% of GDP by the end of 2016, compared to 160% in 2008. Moody’s lowered China’s credit-rating outlook to negative from stable in March 2016, citing rising debt, falling currency reserves and an uncertainty over authorities ability to carry out reforms.
Moody’s is an essential component of the global capital markets, providing credit ratings, research, tools and analysis that contribute to transparent and integrated financial markets. Moody’s Corporation (NYSE: MCO) is the parent company of Moody’s Investors Service, which provides credit ratings and research covering debt instruments and securities, and Moody’s Analytics, which offers leading-edge software, advisory services and research for credit and economic analysis and financial risk management. The Corporation, which reported revenue of $3.6 billion in 2016, employs approximately 10,700 people worldwide and maintains a presence in 36 countries.
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