FILE: China - Date unknown
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1. Various of factories
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2. Automobile manufacturing industry
3. Various of machine counting banknotes
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4. Various of container terminal ports

The Chinese Ministry of Finance on Wednesday said Moody's has overstated China's economic difficulties in taking the decision of downgrading China's sovereign credit rating.

Moody's said earlier on Wednesday that it had downgraded China's long-term local currency and foreign currency issuer ratings to A1 from Aa3 and changed the outlook to stable from negative.

The international rating agency said China's economy-wide debt is expected to continue to rise while its reforms are likely to slow down the potential growth by transforming the economic and financial system.

China's Ministry of Finance responded that Moody's overestimated the difficulties in China's economy and underestimated the Chinese government's capabilities to deepen the supply-side structural reforms and expand the overall demand.

The ministry said China has maintained a good, stable development trend in its economy since the second half of last year. The GDP increased by 6.9 percent in the first quarter of this year, up 0.2 percentage points from the same period of last year. Meanwhile, the country's economic structure has continued to be optimized.

According to the finance ministry, China's total fiscal revenue in the first four months of this year grew by 11.8 percent, increasing by 3.2 percentage points from the same period of last year, the fastest growth in the same period since 2013. The fiscal expenditure during the period increased by 16.3 percent, playing an important role in promoting a steady economic growth and in adjusting the economic structure.

Moody's estimated that the Chinese government debt burden would rise to 40 percent of the GDP by 2018 and further up to 45 percent by 2020. The Chinese finance ministry said the government's debt was 27.33 trillion yuan, with a liability ratio of 36.7 percent, by the end of 2016, below the 60-percent threshold of the European Union. The ratio, which is also lower than the levels of both the main and emerging market economies, shows that the risk is generally controllable, the ministry said.