Fitch Cuts China Yuan Debt Rating on Local Government

Fitch Ratings Ltd. cut China’s long-term local-currency debt rating, citing rising risks to the country’s financial stability given the lack of transparency in the increased borrowing of local governments.

Fitch lowered its assessment by one step to A+, the fifth-highest grade, the London-based company said in an e-mailed statement yesterday. It estimates total credit in China’s economy, including various forms of so-called shadow banking, may have reached 198 percent of gross domestic product at the end of 2012, up from 125 percent four years earlier.