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The US-based rating agency, Moody’s Investors Services is out with its take on Beijing’s stimulus measures, citing that it could be a credit negative for China.

Key Points:

China’s plan to cut personal income taxes is credit negative for regional and local governments.

The action will further widen the gap between their spending needs and funding capacity (a credit negative).

Contributions from personal income tax revenue as proportion of RLGS’ Western revenue will decline to 3% in 2019 from 5.2% 2017.