Another sign we are getting closer to another global recession Moody's has downgraded China's credit rating due to a worse than expected forecast on the economy.
China's outlook has been changed from stable to negative
Increased debt and a slowing down of chinese growth are amongst the largest reasons for this downgrade which increase the cost of borrowing across China
The downgrade comes at a time when China has been actively trying to clean up its borrowing practices which many experts claim could spiral into further financial troubles.
China plays an important part in the world economy being the second largest importer of goods and it is a very large buyer of oil and other commodities.
First downgrade in 25 years for the Chinese economy
If this is not a warning bell then I dont know what is, as the economy slows down and debt increases in this country I think we will see the effects on the global economy in a manner that most would not expect.
Chinese debt is at 260% of Gross domestic product
These levels of debt mean that the risk for the chinese economy is starting to build. It will be interesting to see how the government will handle this downgrade and implement reforms. Likely they will just print more money which in turn will devaluate the Yuan. Of course this is good news for cryptocurrency as a whole!