“The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economywide debt continuing to rise as potential growth slows,” the credit rating company said.

China criticized the move within hours, saying that Moody’s failed to understand China’s legal or financial systems and underestimated the country’s efforts to restructure its economy to achieve more sustainable growth. More broadly, experts inside and outside China believe Beijing probably has the power to stop a meltdown of the kind that slammed the United States and much of the rest of the world a decade ago, thanks to the Chinese government’s considerable financial firepower and ironclad grip on the country’s banking system.

Economists at the International Monetary Fund and at Goldman Sachs have issued a series of increasingly strong warnings about the pace at which the debt is rising. China’s financial system has traditionally been firmly under the control of the central government, giving many economists confidence that Chinese officials could contain a crisis of the sort that gripped the world in 2008. Still, fast growth and signs of fragility in the financial system have given pause to economists and Chinese regulators alike.

Chinese corporate debt has been mounting, and China’s banks show little inclination to force companies to do something about it. China’s banks have kept lending to the country’s state-owned companies, even to those in trouble, to help them make payments on previous loans. That helps those companies stay in business and helps the economy keep growing despite mounting debt.

Regulators and economists are also questioning where China’s lending comes from.

Traditionally, China’s lending has come from four big, state-controlled banks with a solid deposit base. But in recent years, local and provincial banks that lack the deposit base and nationwide branch network of their bigger brethren have grown rapidly, and they now account for half of the assets in the banking system.

Many of these smaller banks raise money partly through borrowing the deposits of the big four banks and partly by selling lightly regulated investments — called wealth management products — to their customers. A growing number of nonbank financial firms also market their own wealth management products and invest the money with little disclosure of where the money goes.

The worry is that if the public loses confidence and stops buying these wealth management products from smaller banks and nonbank firms, a wave of defaults could spread across the economy.