China rejects ‘inappropriate’ credit downgrade, says it ‘exaggerates difficulties’

by Dramelin 7:30 AM 0 comments

Moody`s said that the downgrade reflects its expectation that China`s financial strength will "erode somewhat" over the coming years.
The one-notch downgrade marks the first time Moody`s has lowered China`s credit rating in almost 30 years.
It last downgraded the country in 1989.
It comes as the government moves ahead with its ambitious reform agenda, which it hopes will move the country away from its traditional dependence on manufacturing and towards a services-led economy.
Moody`s argues, however, that these aims will be hampered somewhat by the country`s "economy-wide debt", which it says is set to rise as economic growth slows.
Though the new rating will likely modestly increase the cost of borrowing for the Chinese government, it remains within the investment grade rating range.
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