The Moody’s Investors Service has maintained China’s A1 credit rating, but supported the negative worldview, referring to sustainable trade uncertainty and financial risks, increased debt concern in April 2025.
The actions reflect the deepening of the ability to balance stimulating growth with long-term financial stability as China’s US tariffs and weak global requirements.
China’s government debt is projected to reach 68.3% of GDP in 2025, 60.1% in 2024 target 4% of GDP in GDP.
Authorities plans to leave the ¥ 1.3 trillion in special treasury bonds to finance infrastructure and consumer incentives, are part of efforts to replace growth and deflation pressures.
Fitch Until 2026, the debt warned that GDP can rise to 74.2%, while Beijing’s ¥ 6 trillion initiative in the initiative of reconstruction of local debts three times for similar economies.
Trade tension remains a critical weakness. Although the US-Chinese talks are temporarily reduced to 145% of the main goods, the Moody’s supply chain splitting and high export costs stressed the risks.
China’s post-tariff follows stimulating
President Donald Trump’s 2025 May Trade Policy Shift, the tariffs that threaten the slide from China’s GDP growth, forecasted up to 4.4% in 2025.
Peckin responded, including aggressive financial measures, including interest rates, and reducing interest to facilitate the cost of financing and changing the ¥ 400 billion debt.
These policies can be able to meet these policies with 5% annual growth target, but rating agencies can postpone the incentives only with structural imbalances.
The real estate sector has a long-running effort and weak family expenditures, and the corporate defaults will rise to 1.7% among high-income borrowers.
China’s Finance Ministry rejected rating actions as a “biased”, the reforms have been reduced to local government obligations and risks from state-owned enterprises.
However, Moody’s is expected to have the condition of funding the state, and the general state deficit is expected to organize 8.4% of GDP this year.
As global investors draw this pressure, the cost of increasing the increase through debt-funded projects can be well tested in the economic sustainability of Beijing for ten years.
