China responded assertively to Moody’s decision to maintain its credit ratings but shift its outlook from stable to negative. Chinese officials emphasized the nation’s robust economy, its ability to navigate risks through reforms, and dismissed concerns about growth prospects.
Moody’s Investors Service confirmed China’s A1 long-term local and foreign-currency issuer ratings while expressing worries about fiscal support for local governments and the property sector. In response, Chinese economists criticized Moody’s for bias, deeming its assessment exaggerated and unprofessional.
The Chinese Ministry of Finance issued a detailed statement countering Moody’s points. It highlighted China’s economic rebound, positive growth trends, and expectations of continued recovery. The ministry refuted concerns about growth prospects, citing a GDP growth of 5.2% in the first three quarters and expectations to meet the annual target. On debt, it clarified that the public debt-to-GDP ratio is 50.4%, below the international warning line.
Economists argued that Moody’s recent assessments reflect a bias, pointing out inconsistencies in its treatment of China and the U.S. They questioned the credibility of Moody’s, urging a more balanced approach in rating different economies.
China Chengxin Credit Rating Group also maintained China’s sovereign credit rating with a stable outlook, citing strong economic resilience. Chinese policymakers are anticipated to unveil new policy measures during the annual Central Economic Work Conference in December, aiming to bolster continued economic recovery.
Despite Moody’s negative outlook, Chinese economists remain optimistic, emphasizing the country’s potential for high-speed growth. They anticipate that sustained economic recovery and policy measures will rectify negative expectations.