Moody's: China faces further downgrades unless ballooning credit checked

Reforms not enough

Tom Eckett
clock • 1 min read

China could suffer yet another downgrade from Moody's, as two officials from the ratings agency suggest the country's structural reforms will not be enough to halt rising debt levels.

According to Reuters, senior Moody's official Marie Diron said the ratings agency had been encouraged by China's "vast reform agenda", but it will not be enough to arrest the trend of rising debt. Li Xiujun, vice president of credit strategy and standards at Moody's, added if China's reforms can prevent leverage from rising more effectively without increasing risks in the banking and shadow banking sector, this will have a positive impact on the country's rating. "But if there are signs that China's debt will keep rising and the rate of growth is beyond our expectations, leading to se...

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