Moody's changes China's outlook to stable from negative, affirms A1 ratings
Importance
Level 1
- The stabilisation of the outlook reflects assessment that economic and fiscal strength will be resilient to ongoing domestic as well as trade and geopolitical challenges.
- While export growth will likely moderate, the competitiveness and resilience of Chinese exports to rapid changes in the global trade environment supports its expectation that GDP growth will slow only gradually over the medium term.
- Government policies that prioritise investment in high-productivity sectors while managing supply imbalances will improve capital efficiency
- Moody's expects policy makers will manage the debt resolution process for regional and local governments in a controlled fashion, even as general government debt increases given substantial policy support to the economy