February 24, 2024
Chinese media calls Moody's 'biased', government response appears more restrained

by joe cash

BEIJING (Reuters) – Chinese state media on Wednesday called Moody’s “biased” for its negative rating outlook on the world’s No. 2 economy, but some analysts said the government’s official response was more restrained, in line with Beijing’s concerns about rising debt. Is a sign of one’s own concerns.

Chinese officials often respond to international investigations with aggressive statements. Following previous outlook cuts from Moody’s and S&P Global in 2016, then Finance Minister Lu Jiwei slammed the rating agencies as “biased” during the G20 meeting in Washington.

But in an official statement reacting to Moody’s move on Tuesday, the ministry only expressed “disappointment”. On Wednesday, a Foreign Ministry spokesman said China was capable of deepening reform and addressing its challenges, and he welcomed “all friends” from “all over the world” to invest in its economy.

Alfred Wu, associate professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore, said that while Chinese propaganda was still aimed at showing strength to domestic audiences, the more subtle tone from the government was aimed at the international community.

Wu said it was a sign that China was mindful of global concerns about its weak growth prospects and “wants to appear credible and responsible” in dealing with the issue.

“The buzz about China’s rise was very strong in 2017. The sentiment has changed dramatically,” Wu said.

“The Finance Ministry recognizes this, and needs to respond more professionally than before.”

While keeping China’s sovereign rating at A1, Moody’s cut its outlook to negative from stable, citing growing local debt and property market problems, with many economists warning that these conditions could push the economy into decades of stagnation like Japan. Are pushing towards.

Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis, also said she was “expecting a very different response” from China.

“It was dealt with very easily,” he said. “Once you decide ‘my losses are going to be huge’, there is no point in reacting (to Moody’s).”

The Communist Party’s nationalist tabloid Global Times published an article citing economists that said Moody’s decision was “biased and unprofessional, as it grossly overstated or manufactured the risks and challenges.” Was.”

Moody’s did not immediately respond to questions on Chinese media criticism and the official response.

The state newspaper Economic Daily also said Moody’s drew “biased” conclusions.

But former Global Times editor Hu Zijin, a prominent Chinese commentator, wrote a blog post to praise the “restraint” in the finance ministry’s response, and said the tone was “very commendable”.

“It is more important to boost “domestic confidence” than to spend energy debating whether this (Moody’s move) is a ‘conspiracy’ or not,” Hu said, adding that it was China’s response to the epidemic. Subsequent recovery can be achieved by consolidating and resolving municipal debt. Real estate risk.

“We cannot expect an American rating company to find a way to make the world trust China. Only China can do this,” Hu said.

(Reporting by Joe Cash; Editing by Sri Navaratnam)

Source: www.bing.com

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