Moody's downgrades China outlook

Moody’s (MCO.NYSE) downgraded its outlook on the Chinese economy from “positive” to “stable” on Tuesday while affirming its previous bond rating of Aa3, Reuters reported. Moody’s echoed concerns over excessive local government borrowing expressed by competitor Fitch Ratings earlier this month, when it cut China’s long-term local currency rating from AA-minus to A-plus. “Progress has been less than anticipated in the process of both reducing latent risks by making local government contingent liabilities more transparent and in reining in rapid credit growth; therefore, some of the upward pressure on the Aa3 rating has eased,” the Moody’s report said.