Moody's Investors Service sees a 'very low probability' China's economy will experience a hard landing and believes that even in a worst-case scenario the downside risks to the country's credit fundamentals should not be that severe. 'The threat of overheating or a hard landing is unlikely to affect the credit rating because the external payment position is very strong,' senior credit officer Thomas Byrne said at a briefing in Hong Kong yesterday. He noted China's official foreign-exchange reserves, US$439.8 billion at the end of March, amounted to twice the country's external debt. Exports and foreign direct investment continued to support the balance of payments. However, as the economy responded to government measures to curb excessive investment and credit growth it would increase the pressure on the credit ratings of Chinese corporate debt, he added. Moody's rates China's foreign-currency debt A2 with a stable outlook after a one-notch upgrade in October last year. Hong Kong is rated one notch higher at A1, also with a stable outlook. Mr Byrne believed Chinese authorities would be able to engineer a slowdown in real gross domestic product to '8 or maybe 7 per cent' this year and said signs of overheating were evident only in certain sectors making it unlikely the entire economy would grind to a halt even if interest rates went up.