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E-mail China Daily, April 5, 2025
The Ministry of Finance has said it deeply regrets and firmly disagrees with Fitch Ratings' decision to downgrade China's sovereign credit rating, describing the move as "biased" and "failing to objectively reflect the actual resilience of China's economy and the broad consensus in global markets".
The downgrade was announced despite Fitch's recognition that China has robust economic growth prospects and a key position in global trade based on communications between the company and the Chinese side, the ministry said in a statement late Thursday.
Compared with other economies with similar ratings, Fitch's decision "fails to fully and objectively reflect China's actual situation, and the international and domestic markets' consensus on the recovery and improvement of China's economy", the ministry said.
Fitch downgraded China's sovereign credit rating on Thursday from "A+" to "A", citing expectations of a continued weakening of public finances and rising debt.
Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, said that the agency's justification based on fiscal and debt concerns is "untenable".
"While the size of government debt is important, a sovereign credit rating should reflect a government's actual ability to repay," he said.
The Chinese government said that it will implement a more proactive fiscal policy and a moderately accommodative monetary policy.
"While China's more proactive fiscal policy this year will lead to more government debt, this will support economic growth and thus improve the country's debt repayment capacity," Wang said.
Last year, China's GDP reached 134.9 trillion yuan ($18.52 trillion), with a growth rate of 5 percent, ranking it among the highest growth rates of major global economies.
"China's economy has a stable foundation, many advantages, strong resilience and great potential," said the Ministry of Finance. "The long-term favorable conditions and the general trend of high-quality economic development have not changed.
"Favorable production factors such as talent dividend, capital accumulation and technological progress continue to support growth," it said, adding that structural transformation, emerging economies, urbanization and market-oriented reforms hold great potential.
Fiscal policy coordination across the monetary, employment, industrial, regional and trade sectors, as well as reform and opening-up measures, will be strengthened to support high-quality growth, according to the ministry.
Recently, major global institutions, including the International Monetary Fund and the World Bank, have raised their 2025 growth forecasts for China. International capital markets are also reevaluating Chinese assets and are optimistic about China.
