Fitch Ratings announced a neutral outlook for China in 2024, citing headwinds from subdued external demand, challenges in the property sector, and local government debt. The forecast anticipates a moderation in mainland China's GDP growth to 4.6%, down from just over 5% in 2023. Fitch expects growth to remain broadly stable, surpassing levels of rating peers. The report notes that government advisers may recommend economic growth targets for 2024 ranging from 4.5% to 5.5%, with a preference for around 5%. Fitch emphasizes the likely judicious deployment of policy support, especially fiscal policy, to mitigate downside risks, but warns that such support may widen fiscal deficits and elevate the debt ratio. The migration of debt from local government financing vehicles (LGFVs) to the sovereign balance sheet is projected due to pressures from the property market slowdown. Moody's recent "negative" outlook on China's A1 debt rating is also mentioned, attributing it to challenges in bailing out local governments and controlling the property crisis, factors that could impact China's economic recovery. Fitch reaffirmed China's credit rating at A+ with a "stable" outlook in August.

SOURCE:GOOGLE