Reuters: Moody's Raises China's Rating Outlook to Stable, Debt Pressure Still Rising
Moody's Analytics today raised China's sovereign credit rating outlook from 'negative' to 'stable', while maintaining the A1 rating. This decision was based on China's sustained growth and effective debt management, despite facing domestic and external challenges. However, the Chinese government's debt burden is still expected to increase in the foreseeable future.
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Central News Agency (Taipei, April 27) - Reuters reported that Moody's Analytics today raised China's sovereign credit rating outlook from 'negative' to 'stable', while maintaining the A1 rating. The rationale given was that despite facing domestic and external challenges, China's sustained growth and effective debt management support the stabilization of its rating outlook. However, the Chinese government's debt burden is expected to continue rising in the foreseeable future.
According to the report, Moody's stated in its report that Chinese policymakers will adopt a controlled approach to resolve local government debt. Nevertheless, pressure on the Chinese government will persist, and the government's debt burden will continue to rise in the foreseeable future, albeit with 'manageable downside risks.'
On December 5, 2023, Moody's lowered China's sovereign credit rating outlook from 'stable' to 'negative', while maintaining the A1 rating. The reasons cited were concerns over local government debt and the financial health of state-owned enterprises, triggered by China's real estate crisis. On May 26, 2025, Moody's had still maintained a 'negative' outlook on China's sovereign credit rating.
Regarding the Chinese official response, on December 5, 2023, China's Ministry of Finance expressed 'disappointment' over Moody's lowering China's rating outlook from 'stable' to 'negative'. It asserted that China's macroeconomy in 2023 had 'recovered and improved' and fiscal revenue had 'maintained growth', thus Moody's concerns about China's economic growth prospects were 'unnecessary.'
However, after Moody's today raised China's rating outlook from 'negative' to 'stable', China's Ministry of Finance subsequently issued a statement expressing 'appreciation' for Moody's move. The ministry also stated that it 'will continue to communicate with Moody's rating company, continuously introducing the basic situation of China's macroeconomic stable operation.' (Editors: Chiu Kuo-chiang/Chang Chih-hsuan) 1150427
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According to the report, Moody's stated in its report that Chinese policymakers will adopt a controlled approach to resolve local government debt. Nevertheless, pressure on the Chinese government will persist, and the government's debt burden will continue to rise in the foreseeable future, albeit with 'manageable downside risks.'
On December 5, 2023, Moody's lowered China's sovereign credit rating outlook from 'stable' to 'negative', while maintaining the A1 rating. The reasons cited were concerns over local government debt and the financial health of state-owned enterprises, triggered by China's real estate crisis. On May 26, 2025, Moody's had still maintained a 'negative' outlook on China's sovereign credit rating.
Regarding the Chinese official response, on December 5, 2023, China's Ministry of Finance expressed 'disappointment' over Moody's lowering China's rating outlook from 'stable' to 'negative'. It asserted that China's macroeconomy in 2023 had 'recovered and improved' and fiscal revenue had 'maintained growth', thus Moody's concerns about China's economic growth prospects were 'unnecessary.'
However, after Moody's today raised China's rating outlook from 'negative' to 'stable', China's Ministry of Finance subsequently issued a statement expressing 'appreciation' for Moody's move. The ministry also stated that it 'will continue to communicate with Moody's rating company, continuously introducing the basic situation of China's macroeconomic stable operation.' (Editors: Chiu Kuo-chiang/Chang Chih-hsuan) 1150427
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Text, images, and audio/video on this website may not be reproduced, publicly broadcast, publicly transmitted, or utilized without authorization.