China has rejected a move by Moody's to lower its credit rating, saying the downgrade exaggerates the difficulties facing the economy and underestimates the government's reform agenda.

The country's finance ministry claimed the credit rating agency used "inappropriate methodology" in its decision to lower long-term local and foreign currency issuer ratings from "Aa3" to "A1".

"Moody's views that China's non-financial debt will rise rapidly and the government would continue to maintain growth via stimulus measures are exaggerating difficulties facing the Chinese economy," the finance ministry said in a statement Wednesday, translated by Reuters.

It added that the moves are "underestimating the Chinese government's ability to deepen supply-side structural reform and appropriately expand aggregate demand."