China's Ministry of Finance 'disappointed with' cutting of credit outlook

China's Ministry of Finance said on Tuesday it is "disappointed with" Moody's decision to cut China's credit outlook as the impact of a real estate market downturn on local governments'fiscal conditions is"controllable and structural".

While real estate-related tax revenue has declined, its proportion of local general public budget revenue has not significantly fallen, the ministry said in a statement, adding that the size of local government implicit debt has decreased, sending relevant risks easing.

Ratings agency Moody's on Tuesday cut its outlook on China's government credit ratings to negative from stable, citing lower medium-term economic growth and ongoing downsizing of the property sector, Reuters reported.

"Moody's concerns about the prospects of China's economic growth and fiscal sustainability are unwarranted," the ministry said, adding that the Chinese economy is expected to further recover in the fourth quarter and contribute more than 30 percent — based on the International Monetary Fund's forecast—of global growth this year.

"China will remain a key engine of global economic growth in the future," the statement said, as the country's vast domestic market, easing scarring effect of COVID and an orderly transition in growth engines will underpin high-quality economic development at a reasonable growth rate.?