Moody's maintains stable outlook on Chinese economy

International rating agency Moody's affirmed China's A1 ratings and maintained a stable outlook.

According to a report released by the agency on Thursday, while economy-wide leverage will likely continue to rise and pockets of financial stress will periodically become apparent, the authorities have financial and policy means to contain the rise in leverage, mobilize resources to support stressed public sector entities and maintain financial stability.

Large fiscal and foreign exchange reserves and the government's control of parts of the economy and financial system lend effectiveness to measures aimed at stemming financial stability risks, it said.

Moody's expects tensions with the US to continue and oscillate between more and less intense phases, forecasting China's GDP growth rate will be 6.2 percent and 6.0 percent this year and next, respectively.