China has suffered a downgrade in the latest blow to its economy, after agency Fitch cut its outlook to negative over concerns about rising debt levels. 

Fitch said the world’s second-largest economy was likely to keep amassing debt in an attempt to pull itself out of a property-driven slump. 

The rating agency noted: “Fiscal policy is increasingly likely to play an important role in supporting growth in the coming years which could keep debt on a steady upward trend.”

It comes after China’s public debt has soared in recent years, as the Government has tried to push up growth rates by pumping money into the economy. 

It recently announced new stimulus measures like financial support to help families and businesses upgrade appliances or machinery while suggesting more would follow. 

China criticised Fitch’s downgrade, saying it failed to reflect that its interventions would help spur growth and stabilise the debt burden.