China downgrade points to concerns over long-term financial stability

THE surprise downgrade of China’s sovereign rating by Moody’s, the first time in 30 years, may not have a major impact on markets but points to nagging concerns on its long-term financial stability.

“It is unlikely to trigger a material impact as it is still an investment grade. But China needs to reduce its bloated debt to a sustainable level as that is seen threatening the stability of its financial sector.