China's Finance Ministry expressed its disappointment on Tuesday after Moody's downgraded its credit outlook from "stable" to "negative." The ministry said the Chinese economy is "expected to maintain its rebound and positive trend in the fourth quarter and China is still a key engine of world economic growth," according to the Global Times.
Moody's kept the long-term credit rating at A1 but justified its outlook downgrade by saying that China's reliance on fiscal stimulus for state-owned firms and local government represents a risk to the downside. It also argued that the decision "reflects the increased risks related to structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector." However, the ministry said that the ratings agency's concerns about China's growth, fiscal sustainability and other economic issues are "unnecessary."
