Rating agency Moody’s Investors Service cut its outlook on China’s sovereign credit rating to negative on Tuesday, citing growing risks of persistently lower midterm economic growth and the overhang from a crisis in the property sector.Moody’s said there was rising evidence that the government and state companies would provide financial support to weak regions, “posing broad downside risks to China’s fiscal, economic and institutional strength”.
The agency’s cut in outlook came as China struggles to address multiple economic challenges this year, with Beijing under pressure to tackle a slowdown in the country’s cash-strapped property sector, a debt crisis in weaker provinces and a slowdown in the broader economy.
Investors are also keen to know China’s target for gross domestic product growth next year, with policymakers expected to discuss this at an annual central economic work conference this month.