Moody: China's Economy Keeps GrowingMoody's Investors Service, an authoratative provider of independent credit ratings, research and financial information, predicts that China's economy will still maitain a strong momentum in its lately released annual report, "China: Global Credit Research".Moody says its stable outlook for the country's A3 foreign currency ceiling for bonds and notes and Baa1 foreign currency ceiling for bank deposits is primarily supported by the country's favorable balance of payments position, manageable level of foreign debt, and exceptionally large holdings of official foreign-exchange reserves. "China's external position has fared relatively well in the face of downward global economic conditions and will likely remain strong over the medium term," says the report. "And China's foreign exchange reserves - in both absolute terms and relative to debt service obligations - form a substantial cushion to potential external contagion and shocks." The foreign exchange reserves will also soften any new pressures that may emerge as WTO-induced liberalization takes place. Economic liberalization and the strengthening of regulatory and supervisory capabilities that would accompany WTO membership are likely to sustain large foreign direct investment inflows and add to export capacity and diversification, the report pointed out. China's transitional economy, however, remains burdened by persisting weakness in the state bank and enterprise systems, which will require increasing amounts of fiscal resources to ensure systemic stability, notes the report. The challenge of transforming the state sector and unleashing market forces poses economic, and social risks, says Thomas J. Byrne, author of the report. By PD Online staff member Li Heng |
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