China's Stand Against Fitch's Decision

The Chinese Finance Ministry has openly criticized Fitch Ratings for its recent decision to downgrade China's sovereign credit rating from "A+" to "A". Describing the move as "biased", the ministry argues that it does not accurately reflect the country's economic achievements or its pivotal role in global trade.

Economic Reality Versus Rating Perception

Despite recognizing China's stable growth and significant contributions to international commerce, Fitch adhered to its traditional rating methodology, which, according to China, overlooks the nation's economic resilience and recovery trajectory.

The Debt Debate

Fitch's downgrade was partly based on concerns over China's public finances and escalating debt levels, with projections showing the debt-to-GDP ratio climbing from 60.9% in 2024 to 74.2% by 2026. However, the agency also acknowledged the economy's underlying strength, maintaining a stable outlook amidst these fiscal challenges.