For the first time in more than 25 years, the ratings agency Moody's has downgraded China's debt rating. Graham Mackay reports.
A concrete signal of the growing concern over China's soaring debt. Moody's, one of world's three top credit ratings agencies, downgraded the country's credit score on Wednesday over fears that its financial strength will erode in the coming years. It's the first time Moody's has cut its rating on Chinese debt in more than a quarter of a century. The main worry, the amount of money owed by the government, households and private companies continues to rise. China's rating is now down a notch from A1 to Aa3, still comfortably within the range for an investment grade rating, but yet another sign that the boom times are winding down. That message reinforced by Moody's, which also sees China's economic growth falling to around 5% in the coming years, continuing a steady downwards spiral from the breakneck pace of years gone by. But it's not all doom and gloom. Moody's has also bumped up its outlook on China's credit rating from negative to stable, a bright spot that could help pull investors back in, as debt piles and GDP continue to head in opposite directions.