Foreign media report that on the 27th, Moody’s Analytics raised China’s sovereign credit rating outlook from “negative” to “stable”, while maintaining the A1 rating. The reason is that despite facing domestic and foreign challenges, China’s sustained growth and effective debt management support the stabilization of its rating outlook. However, China’s government debt burden is still expected to continue rising in the foreseeable future.
According to the report, Moody’s stated in its assessment that Chinese policymakers will take a controllable approach to advance the resolution of local government debts. Nevertheless, pressure on the Chinese government will persist, and the government’s debt burden will continue to rise in the foreseeable future, although “downside risks are manageable.”
On December 5, 2023, Moody’s downgraded China’s sovereign credit rating outlook from “stable” to “negative”, while maintaining the A1 rating, citing concerns over local government debt and the financial health of state-owned enterprises resulting from China’s real estate crisis. As of May 26, 2025, Moody’s still maintained a “negative” outlook on China’s sovereign credit rating.
As for China’s official response, on December 5, 2023, China’s Ministry of Finance expressed “disappointment” at Moody’s move to lower China’s rating outlook from “stable” to “negative”, and claimed that the macroeconomic situation in 2023 “continued to improve” and fiscal revenue “remained on the rise,” saying that Moody’s concerns over China’s economic growth prospects were “unnecessary.”
But after Moody’s raised China’s rating outlook from “negative” to “stable,” China’s Ministry of Finance subsequently issued a statement, expressing “appreciation” for Moody’s action, and stated that the ministry “will continue to maintain communication with Moody’s Ratings and continue to present the basic situation of China’s stable macroeconomic operation.”