Fitch Downgrades China to Negative on Rising Public Finance Risks

Following Moody’s lowering of China’s credit rating outlook last December, ratings agency Fitch downgraded its China sovereign credit rating to Negative on Tuesday, citing risks to public finances as the economy shifts to new growth models. Given China’s economic woes in the past two years, while analysts hardly found Fitch’s latest move surprising, the new cut in the ratings outlook, however, highlights increasing concern over debt sustainability. “The Outlook revision reflects increasing risks to China’s public finance outlook as the country contends with more uncertain economic prospects amid a transition away from property-reliant growth to what the government views as a more sustainable growth model,” Fitch said  in its ratings action commentary on Tuesday....