Home / Knowledge / News / Textiles / Moody's: China responding to economic challenges
Moody's: China responding to economic challenges
24
Oct '15
Slower economic growth and rising credit risk are symptoms of the challenge that China (Aa3 stable) faces with structural rebalancing and are developments which have become more prominent since mid-2015, Moody's Investors Service has said.

"Recent events have tended to illustrate the scale of the task confronting the authorities in managing the policy trade-offs involved in structural rebalancing," said Jenny Shi, a Moody's Managing Director and Country Manager for China.

Moody's defines China's rebalancing challenge as the need to engineer economic restructuring, policy reform, market liberalization, and slower credit uptake with the aim of shifting economic growth drivers away from state-led investment -- all without sacrificing short-term macroeconomic stability.

"While there is evidence that the economy is gradually re-orientating away from state-led, capital-intensive growth, the trade-offs are slower headline economic expansion, accelerating capital outflows, and a less certain policy trajectory," said Shi. "System leverage also continues to rise despite slower credit growth."

Shi made her remarks in a speech on October 22 at a conference organized by the US China Business Council in Shanghai. She spoke on the themes of the outlook for China's economy, corporate credit and the development of China's bond market.

Moody's believes that the government's enduring concerns over growth will test its ability and willingness to implement long-term economic policy and market liberalization, objectives that could have negative short-term effects on growth.

In this context, the pace of structural reform -- which is nevertheless proceeding -- will remain gradual and subject to implementation delays or temporary reversals.

"As the authorities are -- we believe -- prioritizing stability in the current environment, the likelihood of a slowdown in policy reform is increasing," said Shi. "In addition, our GDP growth forecasts for China of 6.8 per cent in 2015 and 6.3 per cent in 2016 are based on the assumption that the authorities will further step up monetary and fiscal measures in the face of weakening aggregate demand."

Moody's forecast of a further GDP slowdown is supported by the pervasive weakness of indicators, such as the country's purchasing managers' indices, credit growth, fixed asset investment and weakening labor market conditions.

To date, the policy stimulus measures that have been implemented have been broader-ranging and larger than what Moody's had expected at the start of the year.

Such measures include ongoing monetary easing to help support onshore liquidity, including interest rate and reserve requirement ratio cuts, and fiscal support focused on supporting infrastructure and public works investment. (SH)

Fibre2Fashion News Desk – India


Must ReadView All

Courtesy: Business wire

Textiles | On 28th Jul 2017

Taiwan launches new products at Outdoor Retailer show

The Taiwan External Trade Development Council (TAITRA) hosted the...

Textiles | On 28th Jul 2017

Clariant, Huntsman present update on planned merger

Clariant and Huntsman Corporation have presented a first update on...

Fashion | On 28th Jul 2017

Kering’s first half consolidated revenue up 28.2%

Kering has announced a consolidated revenue of €7,296.2 million for...

Interviews View All

Angelina Francesca Cheang
MY ANJE

'Consumers in the age-group 21 to 38 are driving the activewear trend'

Prabu Mohanram
Balavigna Weaving Mills Pvt Ltd

The biggest challenge that the weaving industry faces is high price

Ajay Ghariwala
Luthra Group

We are ready to adopt or follow every opportunity

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

July 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
61.1%
No
22.2%
Skip
16.7%

Total Votes: 18

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
33.3%
No
44.4%
Skip
22.2%

Total Votes: 18

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
83.3%
No
5.6%
Skip
11.1%

Total Votes: 18

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
50.0%
No
11.1%
Skip
38.9%

Total Votes: 18


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search



X