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Fitch May Downgrade China and Japan: Worldwide Depression Draws Closer

 Asia's two biggest economies are in the ratings firing line alongside Europe and the United States as they deal with massive debts built up during the global financial crisis. Andrew Colquhoun, head of Asia-Pacific sovereign ratings at Fitch, told Reuters in an interview that China's local currency debt rating could be downgraded over the next 12 to 24 months. "We expect a material deterioration in bank asset quality," he said. "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." – Reuters
Free-Market Analysis: It used to be easier to believe in ratings agencies but since the world's greatest companies almost went out of business in 2008 it is more difficult. Now Fitch is once again sounding the alarm on China and Japan but cynics might suggest it is too little too late.

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