China says Moody's downgrade overestimates difficulties facing its economy

Moody's Investors Service downgraded China's credit ratings by one notch earlier on Wednesday, saying it expects the financial strength of the world's second-biggest economy will erode in coming years as growth slows and debt continues to rise.

The ministry said China's government debt will rise at a reasonable pace and rising debt levels from local government financing vehicles and state-owned enterprises (SOEs) will not add to existing government debt.

(Reporting by Yawen Chen and Ryan Woo; Editing by Kim Coghill)