Moody's Downgrades Chinese Banks, Hong Kong, and LGFVs Amid Credit Quality Concerns

Moody's Investors Service has downgraded the outlook for eight Chinese banks, including the big four lenders, to negative from stable, citing the potential decline in the credit quality of China's central government. Moody's also lowered Hong Kong's outlook from stable to negative due to the close political, institutional, economic, and financial ties between Hong Kong and mainland China. The downgrades reflect concerns over China's rising debt levels and their impact on GDP growth. Moody's also slashed its outlook for 22 Chinese local government financing vehicles to negative.