Fitch's sovereign credit rating methodology fails to reflect the impact of recent fiscal policy in promoting growth and stabilising macroeconomic leverage, according to an official from the Ministry of Finance.

In a media interview, the MoF representative said it was regrettable that Fitch decided to recently downgrade the outlook for China's sovereign credit rating. Overall, Beijing’s resolution of local government debt was progressing with risks generally controllable, the MoF spokesperson added.

China’s economy risks missing Beijing’s “around 5%” GDP growth target this year should local governments fail to increase land revenue and meet their increased combined fiscal outlay, an economic policy advisor recently told MNI. (MNI INTERVIEW 2: China 5% GDP Growth Depends On Land Revenue)