Moody's cuts outlook on China govt bonds with continued weak growth ahead

Beijing

RATINGS agency Moody's on Wednesday cut its outlook on China's sovereign bonds from stable to negative, warning of increasing government debt and further capital outflows and questioning Beijing's ability to implement economic reforms.

The Chinese government's fiscal strength has weakened with borrowing increasing across the economy and financial system and stress mounting in state-owned enterprises, Moody's Investors Service said in a statement.

It said continued weak growth was likely to see liabilities mount at policy banks - state-owned entities that fund projects according to government instructions - as authorities pu…