Financial Secretary Paul Chan said he strongly disagreed with the rating agency's decision to "mechanically downgrade" Hong Kong's local currency and foreign currency issuer ratings by one notch to Aa2 from Aa1 shortly after cutting China's rating on Wednesday.
At the same time, Beijing's need to deliver on official growth targets is likely to make the economy increasingly reliant on stimulus, Moody's said. The ratings agency also changed its outlook for China to stable from negative.
Mei said China's economic performance this year had exceeded market expectations and criticized Moody's for including debt at state-owned enterprises (SOEs) and local government financing vehicles as indirect government liabilities. But he added, "It doesn't matter much in the grand scheme of things because so much of Chinese debt is held by state or quasi-state actors and minimal amounts are worldwide investors".
A finance ministry statement accused Moody's of using "inappropriate methods" that it said gave a false picture of China's financial outlook.
China's total debt reached 253% of its GDP in 2016, up from 213% in 2013 and 149% in 2008, according to JP Morgan.
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While China's leaders acknowledge the necessity for effectively containing financial risks and asset bubbles, financial authorities wary of knocking economic growth, are not ready to raise short-term interest rates and tighten regulation.
The downgrade, which is the first for China since 1989, was quickly dismissed by the government's finance ministry.
Global banking and financial advisory provider Macquarie, "This news is a clear China negative in our view (even though the rationale for the downgrade contained nothing new)", and "The next question is whether S&P will follow Moody's". China's National Development and Reform Commission (NDRC) said debt risks were generally controllable as measures to lower corporate leverage had achieved initial results, and systemic risks from debt were relatively low.
"The planned reform program is likely to slow, but not prevent, the rise in leverage", Moody's said.
The move brings Moody's in line with rival Fitch, which has had an equivalent A+ rating on China since November 2007.
"Our projections show that China would still be able to maintain (a growth rate) of around 6 per cent by 2020", he noted. Moody's had estimated in October that China's "shadow banking" sector - off-balance-sheet lending that evades official risk supervision - totalled $8.5 trillion, or almost 80 percent of GDP.