2024-04-13 13:30:34
New Delhi: China’s economy, which was the engine of the global economy for many decades, is beginning to fail. The country’s economy is struggling on many fronts and now Fitch has also downgraded China’s credit rating. He says that China is facing many economic challenges and the risks regarding its financial condition are continuously increasing. Fitch has changed China’s outlook from stable to negative. Due to this, the possibility of China’s creditworthiness being downgraded has also increased. However, Fitch has still maintained the rating of China’s sovereign bonds at A+. China has been struggling with a real estate crisis for a long time, which poses a threat of collapse of the entire economy. Fitch said in a statement that the change in credit rating reflects that risks to China’s public finance outlook continue to remain high. Is increasing. The country is moving from property-dependent growth to a sustainable growth model, due to which there is uncertainty about the future of the economy. The Chinese government is focusing on other sectors to reduce dependence on real estate. Real estate accounts for about 30 percent of the country’s GDP. But for the last few years it is in deep crisis and due to this there is a possibility of collapse of the entire economy of the country.
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Fitch estimates that the government deficit in China could increase to 7.1 percent of GDP in 2024, which was 5.8 percent last year. This loss will be the highest after 2020 when the government treasury was badly affected by the restrictions imposed due to the Corona epidemic. However, the Chinese government has expressed regret over Fitch’s move. The government says that it had discussed with the Fitch Ratings team in full seriousness at the initial stage and this report does not depict the real picture of China. It does not mention the positive role of fiscal policy in economic growth. This will greatly benefit the economy in the long term.
Earlier in December, rating agency Moody’s had also downgraded China’s credit rating from stable to negative. He said that the property sector is in deep crisis and due to this the entire economy is likely to be affected. China is the second largest economy in the world after America. But for some time now, China’s economy has been struggling on many fronts. People are avoiding spending due to fear of recession. Domestic consumption has been affected by this. At the same time, there is tension in relations with America. The country’s exports are falling while foreign investors have also started turning away. Last year, China’s stock market performance was the worst in the world. Foreign companies are also packing their bags from China.