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Moody's Keeps China A1 Rating as Q1 Grows 5%

4/28/2026

38 8 Full Breakdown

Summary

Moody's Affirms

Moody’s affirmed China’s sovereign rating at A1 and changed the outlook from negative to stable on Monday.
China’s GDP exceeded 35 trillion yuan in five years, with an average annual growth of 5.4% during the 14th Five-Year Plan (2021-2025).
China’s Q1 2026 growth reached 5%, beating expectations.
The government deployed a macro-policy package to offset trade shifts and geopolitical risks.

Summary

BNY Mellon Boosts

Bank of New York Mellon analysts said the rating revision shows confidence and should boost Chinese government debt.
The yuan hovered near 6.8 per dollar while the 10-year bond yield stayed around 1.8%, below Japan’s.
Overseas funds set a record buying Chinese onshore bonds via Hong Kong last month, reflecting growing foreign appetite despite the agency’s note that China’s state-owned financial system and high savings buffer rising debt risk.

History

Historical Context

China’s July 2017 launch of Bond Connect let overseas investors trade mainland sovereign bonds through Hong Kong, spurring about $10 billion of purchases in its first year. The scheme built on earlier liberalisations—2004’s permission for Hong Kong banks to handle RMB deposits, which grew to ¥59 billion by 2009, and the 2014 Shanghai-Hong Kong Stock Connect—deepening the yuan’s global integration.

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Moody's Affirms

Moody’s affirmed China’s sovereign rating at A1 and changed the outlook from negative to stable on Monday.
China’s GDP exceeded 35 trillion yuan in five years, with an average annual growth of 5.4% during the 14th Five-Year Plan (2021-2025).
China’s Q1 2026 growth reached 5%, beating expectations.
The government deployed a macro-policy package to offset trade shifts and geopolitical risks.

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