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Fitch Downgrades China, Citing “Underlying Structural Weaknesses”


Is China’s economy in trouble? That’s what most outside experts on the world’s second-biggest economy will tell you. Today Fitch, the global ratings agency, endorsed that judgment.

The FT reports: “Fitch on Wednesday downgraded the country’s long-term local currency rating from AA- to A+, citing a number of “underlying structural weaknesses” in the Chinese economy, including low average incomes, lagging standards of governance, and a rapid expansion of credit.”

“The process of rebalancing the economy towards consumption could lead to the economy’s performance becoming more volatile”, said Fitch in a statement.

As we noted earlier today, China is seeking to pivot its economy from low-wage manufacturing to high-tech industry focused on domestic consumers. This is not an impossible task, but we have no doubt the road ahead will be a bumpy one.

[Image courtesy Getty.]

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  • Atanu Maulik

    So many around the world will be so disappointed as the latest challenge to US primacy fizzles out.

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