Saying the economy of China and their sound balance of payments has helped them perform strongly, Moody's (NYSE:MCO) upgraded their rating on the country today from A1 to Aa3.
Moody's senior vice president Tom Byrne said, "The record of the past year demonstrates that China's policy response to the 2008 crisis has been effective. Real GDP growth initially rebounded rapidly in response to the stimulus measures, and is moderating to a more sustainable rate of growth, which seems likely to be around 9%-10% this year, and perhaps 8%-9% in 2011."
It's interesting to see Moody's, which is based in the United States, upgrade China almost immediately after China's Dagong rating agency lowered the U.S. credit rating from AA to A+ after the Federal Reserve announced they're going to implement another round of quantitative easing which Dagong said would reduce the ability of the U.S. to repay their debt.
Showing posts with label China Debt. Show all posts
Showing posts with label China Debt. Show all posts
Thursday, November 11, 2010
Monday, March 15, 2010
Citigroup (NYSE:C) Right on China Debt
Citigroup on China Debt and Risk
Citigroup (NYSE:C) was right when it warned China could have some major problems based on local government debt issues in the country. Seeming to confirm that, China Premier Wen Jiabao said China faces some challenges in that regard of its own, but the global economy also faces major problems going forward, with double dip recession very possible.
Of particular concern to Wen was the export market, which remains down, as consumers (especially Americans), hold back on spending, causing demand for products to continue to falter.
Other things that could dramatically impact the markets could be ongoing instability in the exchange rates, along with continuing sovereign debt problems in Europe, which while temporarily relaxed because of commitment by the European Union to back Greece if its efforts don't pan out, still are there with more important countries like Portugal, Ireland, Italy and Spain, which if any were to fall would be much more damaging than the fall of Greece; as far as the EU being able to save them goes.
For China, there are also issues of the extraordinary debt they now have as the consequences of their stimulus program, which Citigroup estimates could result in up to $350 billion in bad loans in the years ahead.
Citigroup (NYSE:C) was right when it warned China could have some major problems based on local government debt issues in the country. Seeming to confirm that, China Premier Wen Jiabao said China faces some challenges in that regard of its own, but the global economy also faces major problems going forward, with double dip recession very possible.
Of particular concern to Wen was the export market, which remains down, as consumers (especially Americans), hold back on spending, causing demand for products to continue to falter.
Other things that could dramatically impact the markets could be ongoing instability in the exchange rates, along with continuing sovereign debt problems in Europe, which while temporarily relaxed because of commitment by the European Union to back Greece if its efforts don't pan out, still are there with more important countries like Portugal, Ireland, Italy and Spain, which if any were to fall would be much more damaging than the fall of Greece; as far as the EU being able to save them goes.
For China, there are also issues of the extraordinary debt they now have as the consequences of their stimulus program, which Citigroup estimates could result in up to $350 billion in bad loans in the years ahead.
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