May 24, 2017

CHANGE: Moody’s Cuts Its China Rating for the First Time Since 1989.

Moody’s Investors Service cut China’s sovereign credit rating for the first time in nearly three decades, citing expectations that the country’s financial strength will deteriorate in the coming years as debt keeps rising and the economy slows.

In a Wednesday statement, Moody’s said it downgraded China’s rating to A1 from Aa3, while changing its outlook to stable from negative. In March of last year, it cut China’s outlook to negative from stable. Moody’s last cut its China credit rating in November 1989, not long after the bloody crackdown on mass protests in Beijing’s Tiananmen Square rocked the nation. Moody’s now rates China’s credit alongside that of countries such as Japan, Saudi Arabia and Israel.

Nobody really knows what’s going on in China’s economy, not even Beijing.

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