#加密市场回调

Today there is another matter, Fitch downgraded China's sovereign credit rating from A+ to A, with a stable outlook. In response, the Chinese side's statement was biased and not recognized. I checked the logic behind the downgrade; Fitch stated that China's fiscal capacity is weakening, public debt is rising rapidly, domestic demand is sluggish, tariffs are increasing, and deflationary pressures are intensifying. Fitch believes that China needs to stimulate consumption next, but fiscal revenue cannot support this, so continued borrowing is necessary, and the deficit rate will rise year by year, roughly like this.

Some netizens feel that the downgrade of China's sovereign credit rating by American institutions is a form of political suppression; however, this may not be the case. In August 2023, Fitch also downgraded the U.S. sovereign credit rating from AAA to AA+, citing the deterioration of the U.S. government's finances and increasing debt. These rating agencies still maintain a strong degree of independence in their business positions and are not merely crude political tools.

So what are the negative impacts of the downgrade? First, it will lead to an increase in financing rates for Chinese sovereign bonds, raising the overseas financing costs for both the government and enterprises. Some institutions estimate that this Fitch downgrade will lead to an increase in financing costs for Chinese dollar bonds by $6-8 billion next year.

Secondly, the downgrade will lead to passive rebalancing by some international investment institutions, similar to the principle of adjustments in index constituent stocks. Furthermore, the downgrade will affect the capital market's confidence in Chinese assets, especially against the backdrop of the increasingly tense international situation. In summary, this rating event should not be overlooked, especially given Fitch's demonstrative role, which may lead several other well-known rating agencies to follow suit in downgrading their ratings. In fact, China has also been vigorously cultivating local rating agencies in recent years, such as Dagong Global Credit Rating, United Ratings, and China Chengxin International Credit Rating, but their influence on the international stage is still not large enough, lacking a voice.