Moody’s Ratings has affirmed China’s long-term credit ratings at A1 and upgraded the country’s outlook from “negative” to “stable.” This rating change reflects the resilience of the Chinese economy and financial system in the face of geopolitical and trade challenges.

Moody’s expects China’s real GDP to grow by 4.5% in 2026 and 4.2% in 2027. The competitiveness of exports and resilience to shifts in the external environment contribute to a gradual slowdown in economic growth rates in the medium term. The Chinese government’s policy focuses on prioritizing investments in high-performance industries, which enhances overall capital efficiency and helps manage supply imbalances.

The government’s debt burden is projected to continue growing, reaching 82.4% of GDP by 2027, up from 68.5% in 2025, and it may exceed 90% by the end of the decade. This increase in debt reflects ongoing fiscal support for the economy and the integration of local government debts into national liquidity stabilization programs. Low interest rates, supported by significant domestic savings, enable the government to effectively manage the cost of servicing obligations within a predominantly state-controlled financial system.

China’s large and diversified economy demonstrates a strong capacity for innovation in high-value-added sectors. Progress in technology industries allows the country to offset pressures from demographic changes and an aging population. As of April 27, 2026, China’s local- and foreign-currency country ceilings remain unchanged at Aaa and Aa1, respectively.