Fitch Ratings has said that China will be able to avoid a hard landing in the years to come.

According to the credit ratings agency, while the rising leverage can cause systemic vulnerability, the characteristics of China's financial system and broader economy mitigate against a disruptive outcome.

The agency expects the Chinese economy to grow between six and 6.5 percent in 2016 and 2017, and the yuan to weaken by only around 5 percent against the U.S. dollar in 2016.

Fitch said it broadly agrees with the Chinese government's assessment that its macroeconomic fundamentals do not necessarily point to a substantial depreciation of the yuan.

Earlier, the two other major rating agencies -- Moody's and Standard & Poor's -- lowered their outlook for China's government credit from "stable" to "negative".

The Chinese Finance Ministry expressed disapproval over their recent downgrade of China's credit outlook, saying any worries were "unnecessary".