Moody's has warned it may downgrade China’s sovereign rating, a sign of increasing investor concern over the country’s rising debt and dwindling foreign exchange reserves.
The US rating agency revised its outlook on China from stable to negative, the first major step on the country by a rating agency since Fitch downgraded its rating three years ago, the first cut since 1999.
Moody’s rates China’s government at Aa3, its fourth highest rating. That is in line with Standard & Poor’s double A minus rating, although S&P maintains a stable outlook. Fitch assesses China at A plus, one notch lower than its two peers, also with a stable outlook.