Fitch downgrades China's outlook over economic worries

Fitch downgraded its outlook on China’s credit rating, citing increasing risks to its finances due to economic challenges. The outlook was lowered from stable to negative, increasing the chances of a creditworthiness downgrade. Fitch maintained its rating on Chinese sovereign bonds at A+. The revision reflects the risks faced by China’s public finance outlook amid a transition away from property-reliant growth. Fitch predicts a rise in the general government deficit to 7.1% of GDP in 2024, with this year’s deficit expected to be the highest since 2020. China’s Finance Ministry expressed regret over the revision but emphasized the long-term positive trend of China’s economy. In December, Moody’s also downgraded China’s credit rating outlook citing risks related to lower economic growth and troubles in the property sector.