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Article snippet: SHANGHAI — Moody’s Investors Service downgraded its credit rating on China’s sovereign debt by a notch on Wednesday, saying the steady buildup of debt in the Chinese economy would erode the country’s financial strength in the years ahead. In a bluntly worded statement, Moody’s said the Chinese government remained committed to achieving high economic growth despite slowing productivity gains and a shrinking population of working-age adults. The only way for China to achieve such high growth is to allow its debt to continue to grow as a way to stimulate the economy, Moody’s warned. “The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economywide debt continuing to rise as potential growth slows,” the credit rating firm said. Moody’s moved down China’s debt rating to A1, from Aa3, but changed its outlook for further ratings adjustments to stable, from negative. Chinese officials, who have tried hard to persuade the Chinese public and the international financial community that they have the country’s debt troubles well in hand, criticized the downgrade. China’s Finance Ministry said that Moody’s failed to understand China’s legal or financial systems and underestimated the country’s efforts to restructure its economy to achieve more sustainable growth, a process it has called supply-side reform. Moody’s criticisms “to some extent overrated the difficulties that the Chinese economy is facing, and u... Link to the full article to read more