Is China going to default? Fitch cuts rating to negative
How a domestic rating agency wants to take on the big guns China's finance ministry called the Fitch rating "regrettable". "From the results, it can be seen that the indicator system of Fitch's sovereign credit rating methodology has failed to effectively and proactively reflect" Beijing's efforts to promote economic growth, it said.
It also said projected lower economic growth "exacerbates challenges to managing high economy-wide leverage". Fitch affirms United States' ratings at 'AA ', outlook 'stable' Fitch forecast China's economic growth would slow to 4.5% in 2024 from 5.2% last year.
However, "Fiscal policy is increasingly likely to play an important role in supporting growth in the coming years which could keep debt on a steady upward trend," Fitch said. While Fitch lowered its outlook, it maintained China’s long-term foreign-currency issuer default rating at A.
Fitch raises India GDP growth estimate for FY24 to 7.8% 'S&P, the other major global rating agency, also rates China A, the equivalent of Moody's A1. China’s public debt has shot up over the past few years as the Xi Jinping government pumped funds into the economy.
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