The drop in China’s exports caused by Europe’s debt crisis may affect whether Moody’s Investors Service raises the nation’s sovereign debt rating, said Tom Byrne, a senior vice president at the company.
China’s local governments are seeking global investors to cut costs on 17.9 trillion yuan ($2.9 trillion) in debt as the property market weakens, yields surge and economic growth cools to the slowest in 24 years.
Japan may “at some point” reach a fiscal “tipping point” if investors lose confidence in the soundness of government finances and demand a risk premium on the nation’s bonds, Moody’s Investors Service said.
JPMorgan Asset Management and Invesco Asset Management say China’s cooling property market is an opportunity to boost dollar bond holdings as the government’s targeted stimulus benefits the largest developers.
Chinese Premier Li Keqiang told German business leaders his country is confronted by “huge challenges” as it seeks 7 percent annual growth this decade, down from more than 10 percent in the previous 10 years.