Moody's says China growth in medium term to remain robust

Moody’s Investors Service said that China’s authorities have begun to prepare for a rebalancing of the economic roles of the public and private sectors, which if successful would imply a fundamental realignment in the country’s political economy over the next decade.

In a special report, Moody’s said that a new phase of structural policy reforms is coming into focus following the Chinese government’s recent announcement of a new, lower annual GDP growth target of 7.5 percent.

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On whether China can avoid a hard landing, the report said Moody’s sees growth remaining relatively robust over the medium term, provided that the country is spared severe economic or political shocks.

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“The new target underscores the government’s desire to engineer a soft landing, consistent with its long-term goal of seeking more balanced growth, decreasing the economy’s reliance on investment and exports, while increasing the share of consumption,” Tom Byrne, a senior vice president with Moody’s Sovereign Risk Group, said in a statement.

“In addition, we believe the authorities currently have time to prepare for this rebalancing.”

Reuters