# Fitch Ratings Agency cut China’s sovereign credit outlook to negative

- Link: https://www.thailand-business-news.com/banking/135417-fitch-ratings-agency-cut-chinas-sovereign-credit-outlook-to-negative
- Published: 2024-04-12T08:11:00+07:00
- Author: Zhang Fang

Fitch Ratings Agency has downgraded China’s sovereign credit outlook to negative
due to concerns about escalating risks in the country’s public finances.

 * Fitch Ratings Agency has cut China’s sovereign credit outlook to negative due
   to escalating risks surrounding the country’s public finances, highlighting the
   increasing reliance on fiscal policy to bolster growth.
 * Despite China’s “A+” credit rating, Fitch’s decision underscores concerns over
   the country’s economic stability, especially amid a persistent property sector
   crisis and the projected slowdown in economic growth.
 * Analysts view Fitch’s decision as a warning sign for China to delicately balance
   managing growth deceleration and increasing debt, while the Chinese finance ministry
   vows to address risks associated with local government debt to maintain economic
   growth and stability.

The decision reflects worries about China’s economic stability, particularly in 
light of a property sector crisis. Chinese authorities have been trying to stimulate
economic growth while facing challenges such as a downturn in the real estate sector.

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Despite implementing measures to fuel infrastructure and consumer spending, experts
argue that more efforts are needed. Fitch’s outlook revision highlights the increasing
risks to China’s public finance outlook and the growing reliance on fiscal policy
to bolster growth, which could lead to rising debt levels. Beijing has expressed
disappointment with the downgrade and emphasized the importance of long-term fiscal
strategies to support domestic demand and economic expansion.

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Analysts see the decision as a warning sign and emphasize the need for China to 
manage growth deceleration and increasing debt carefully. Despite China’s commitment
to addressing risks associated with local government debt, Fitch’s concerns and 
other rating agencies’ challenges remain.