Ratings agency Moody's slapped a downgrade warning on China's credit rating on Tuesday, saying costs to bail out local governments and state firms and control its property crisis would weigh on the world's No. 2 economy.
Moody's lowered the 'outlook' on China's A1 debt rating to "negative" from "stable" less than a month after it had done the same to the United States' last remaining triple-A grade from a credit rating agency.
Historically, about one-third of issuers have been downgraded within 18 months of the assignment of a negative rating outlook.
China's Finance Ministry called the decision disappointing, saying the economy would rebound and that the property crisis and local government debt worries were controllable.
