Moody's excessive concerns for Chinese economy unwarranted
Credit rating agency Moody's recent move to downgrade its outlook for Chinese sovereign bonds from stable to negative reflects its lack of understanding of China's economic operations. Despite affirming China's A1 long-term local and foreign-currency issuer ratings, Moody's downgraded its outlook on sovereign bonds, citing lower medium-term economic growth and ongoing downsizing of the property sector. The adjustment is unwarranted and flawed.
To objectively view China's economy, one must observe not only short-term problems, but also its long-term development trend. The overlapping of external risks and challenges and domestic factors has indeed exerted downward pressure on the Chinese economy, but China's GDP grew by 5.2 percent year-on-year in the first three quarters, leading the world's major economies. The 0.4 percent CPI growth year-on-year in the first 10 months was also in sharp contrast to the high inflation in other major economies. The Organization for Economic Cooperation and Development recently raised its forecast of China's economic growth for this and next year, and the International Monetary Fund and a number of other financial institutions also hold an optimistic outlook on China's economy.
An objective view of China's economic operation is inseparable from a historical perspective and vision. It is a general economic law that when an economy reaches a certain scale, its growth rate will slow down. China's economy has always managed to grow and become stronger after withstanding tests and challenges.
The system of socialism with Chinese characteristics and the ever-improving system of the socialist market economy will provide a strong guarantee for China's high-quality development. The country's colossal consumer market and the huge potential emanating from its huge population's clothing, food, housing, transportation and cultural needs will inject endless vitality into China's economic development. The world's most complete industrial system and increasingly complete infrastructure network will lay a solid foundation for China's economy to navigate various complex and difficult situations.