MOODY'S Investors Service yesterday affirmed Aa3 rating for China's government bond but cut its outlook to stable from positive as not enough progress has been made in reducing risks in government debt and reining in credit expansion.

"Positive structural reforms under the new leadership are expected over time, but their scope and pace may not be sufficient over the course of the next 12-18 months to justify a rating upgrade," Moody's said in a statement.

But the current Aa3 rating is underpinned by robust economic growth of 7.5-8 percent in 2013 and 2014, strong central government finances and abundant foreign exchange reserves, Moody's said.

It said the main constraints on upgrading are to do with contingent liabilities, which could affect the central government's balance sheet and derail the transition to a more balanced and moderately growing economy.

Last week, Fitch lowered China's local currency bond rating from AA- to A+, citing financial risks from rapid credit growth and the rise of shadow banking.

On Monday, the World Bank cut China's 2013 economic growth forecast to 8.3 percent from 8.4 percent.