Fitch downgrades China's rating to 'A'

Global ratings agency Fitch on Thursday downgraded China's long-term foreign currency credit rating to 'A' from 'A+', on expectations of weak public finances and rapidly rising debt.

The latest US reciprocal tariffs have not been incorporated in the forecast, Fitch said, adding that there is uncertainty about their impact.

The government's debt-to-GDP ratio is expected to rise further over the next few years due to trade tensions with the US, subdued domestic demand and deflationary pressure, the rating agency said.

It expects China to be affected by a broader tariff-induced global slowdown, despite the country appearing more resilient to direct US tariffs compared to President Donald Trump's first term.

China's yuan dropped to its lowest level in seven weeks and stock markets slumped on Thursday after Trump unveiled a sweeping set of reciprocal tariffs that were particularly heavy on China and its main trading partners.

REUTERS