China Hit by First Moody’s Downgrade Since 1989 on Debt Risk Bloomberg News May 23, 2017, 5:26 PM PDT May 24, 2017, 12:44 AM PDT


Photographer: Johannes Eisele/AFP via Getty Images

Moody’s Investors Service cut its rating on China’s debt for the first time since 1989, challenging the view that the nation’s leadership will be able to rein in leverage while maintaining the pace of economic growth.

Stocks and the yuan slipped in early trading after Moody’s reduced the rating to A1 from Aa3 on Wednesday, with markets paring losses in the afternoon. Moody’s cited the likelihood of a “material rise” in economy-wide debt and the burden that will place on the state’s finances, while also changing the outlook to stable from negative.

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Moody’s Associate Managing Director Sovereign Risk Group Marie Diron discusses China’s debt rating (Source: Bloomberg)

 

 

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