BEIJING: China has made a substantial progress on reforming and rebalancing its economy, Moody’s Investors Service said here the other day.
“Substantial progress has been made on reform and rebalancing, and the general direction of government policy is supported by important initiatives such as the anti-corruption campaign and the ‘One Belt, One Road’ strategy,” said Michael Taylor, a Moody’s managing director and chief credit officer for Asia Pacific.
The agency said that since the government committed to deep reforms during a high level economic meeting in November 2013, efforts have been made to direct the economy away from state-led, capital intensive investment toward private consumption as well as lower the economy’s dependence on credit-fuelled growth.
Moody’s said the government has implemented policies to allow markets to play a decisive role and ensure that short-term growth does not fall substantially below the target of around 7 percent.
But Moody’s expressed caution over two main risks — price corrections of real estate and equities, and rapid and ill-prepared liberalization of capital account.
Though monetary and regulatory polices have helped stabilize China’s housing market, substantial new construction projects will not be started soon, Moody’s said.
The rating agency is confident that China’s economy will avoid a hard landing because the government can use numerous policy tools to guide a managed slowdown.
