Fitch threatens downgrade of China's local debt rating

Fitch Ratings has warned it may downgrade China's local currency debt rating within two years on fears over the state of the country's indebted banks.

The ratings agency said with the country's banks struggling to offload debt built up during the credit crisis, China's AA- local currency credit rating is in jeopardy, according to Reuters. Fitch added Japan is also in danger of losing its AA-rating as it had racked up debt equivalent to 210% of GDP by the end of last year. Andrew Colquhoun, head of Asia-Pacific sovereign ratings at Fitch, told Reuters: "If the problems in the banking system pan out as we expect or are even worse over the next 12 to 24 months, then that would incline us to take the rating downwards." Fitch downgrad...