FX.co ★ Fitch Cuts China's Credit Rating to A

On April 3, 2025, Fitch Ratings announced a downgrade of China's long-term sovereign credit rating, reducing it from A+ to A, while adjusting the outlook from negative to stable. This marks Fitch's first alteration of China's rating in 18 years. The agency cited concerns over the ongoing deterioration of China's public finances and the rapid escalation of public debt, attributed to the nation’s economic transition. Projections indicate that the government debt-to-GDP ratio will continue its steep rise in the coming years, fueled by substantial deficits, the realization of contingent liabilities, and modest nominal GDP growth. Furthermore, Fitch highlighted significant challenges confronting China, including weak domestic demand, deflationary pressures, and increased trade tariffs. Nonetheless, the agency acknowledged the robust structural attributes of the Chinese economy, such as its pivotal role in global trade, significant foreign exchange reserves, and position as a net creditor.