May 24, 2017 / 5:17 AM / 2 months ago

China says Moody's downgrade overestimates difficulties facing its economy

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FILE PHOTO: A female migrant construction worker walks into her dormitory near newly-built residential apartments in Shanghai August 12, 2013.Aly Song/File Photo

BEIJING (Reuters) - China's finance ministry said on Wednesday that a credit downgrade by Moody's was based on inappropriate methodology, saying it was exaggerating difficulties facing the economy and underestimating reform efforts.

Moody's Investors Service downgraded China's credit ratings by one notch earlier on Wednesday, saying it expects the financial strength of the world's second-biggest economy will erode in coming years as growth slows and debt continues to rise.

The ministry said China's government debt will rise at a reasonable pace and rising debt levels from local government financing vehicles and state-owned enterprises (SOEs) will not add to existing government debt.

Reporting by Yawen Chen and Ryan Woo; Editing by Kim Coghill

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