Fitch Ratings has downgraded China's sovereign credit outlook to negative due to increasing risks to the country's public finance outlook as it moves away from real estate-led growth. The government deficit is expected to rise to 7.1% of GDP in 2024, with government debt forecasted to increase to 61.3% of GDP this year. Fitch highlighted wide fiscal deficits, rising government debt, and the role of fiscal policy in supporting growth. China's Ministry of Finance expressed disappointment with the decision, citing inadequate reflection of positive fiscal policy effects in Fitch's rating methodology.
Economist Nicholas R. Lardy argues that China has the potential for significant growth in the coming years, likely to outpace the United States. Adjusting for inflation, China's GDP growth exceeded the US. Lardy refutes misconceptions about China's internal spending and investment collapse fears. Despite challenges, renowned economist Huang Yiping predicts China's economy will improve, with a growth target of around 5% for 2024 achievable. Efforts to boost recovery, stabilize employment, and stimulate consumption are emphasized, with a focus on increasing productivity and innovation for sustained growth.
China's economy started the year with robust growth, with a forecasted year-on-year GDP growth of about 4.8% for the first quarter and around 5.1% for the second quarter. Manufacturing activity expanded at the fastest pace in 13 months in March, with the Caixin/S&P Global manufacturing PMI rising to 51.1. Official factory data also showed positive growth, indicating a bright start to the year. Policymakers aim to maintain high growth rates through fiscal support and stimulus measures amidst lingering uncertainties in the economy.
This is a list of countries by credit rating, showing long-term foreign currency credit ratings for sovereign bonds as reported by the largest three major credit rating agencies: Standard & Poor's, Fitch, and Moody's. The list also includes all administrative divisions not issuing sovereign bonds, but it excludes regions, provinces and municipalities issuing sub-sovereign bonds.
China's Ministry of Commerce pledges to implement measures to improve the foreign investment environment, following guidelines set by the State Council. Significant progress has been made in attracting foreign investment, with a notable increase in newly established foreign-invested enterprises. Foreign business associations in China appreciate the government's efforts, expressing satisfaction with the business environment. Over 90% of foreign businesses find the Chinese market attractive, boosting confidence in future investments. The State Council plans to strengthen policies to attract and leverage foreign investment, focusing on market access, fair competition, and innovation.
The US government's debt has more than doubled in the past 15 years, reaching over $34 trillion, with projections to rise to 166% of GDP by 2054. Concerns about the debt increasing interest payments, inflation, and global financial crisis risks were raised by fiscal watchdogs. Comparisons were made to the UK's market chaos in reaction to unfunded tax cuts. Experts warn of a potential bond market crisis if interest payments soar. Despite these warnings, investors continue to push assets to record highs, while economists caution about the impact on public services and policy choices.
China's Ministry of Culture and Tourism is actively promoting inbound tourism to aid in the sector's recovery, with measures taken by various regions and tourism companies to attract tourists. During the Spring Festival, China's visa-free policy for several countries led to a doubling of tourists entering, including from France, Germany, Italy, the Netherlands, Spain, Malaysia, and Singapore. Cities like Sanya, Hangzhou, and Zhangjiajie have seen significant increases in international tourists. Payment methods like digital yuan and Alipay are being utilized by foreign tourists in China, with a surge in spending during the holidays. Domestic tourism during the Spring Festival saw a significant increase in trips and revenue, with Guangdong province leading in both categories. There is anticipation for a surge in travel interest for upcoming holidays, indicating a strong recovery and potential growth in China's tourism industry.
Chinese Foreign Minister Wang Yi wrapped up a highly successful tour of New Zealand and Australia on Thursday with a private meeting in Sydney alongside former Labor prime minister Paul Keating after a tight schedule. Although there were no major announcements, analysts say the visit was a further sign of the stabilization of the Australia-China relationship under the Labor government headed by Prime Minister Anthony Albanese. James Laurenceson, director of the Australia-China Relations Institute at the University of Technology Sydney, said Wang's trip was significant in that it was the first in seven years. "When it came to the Australia-China relationship specifically, listening to him talk was almost a carbon copy of what our Foreign Minister (Penny Wong) has been saying," Laurenceson told China Daily. After the seventh China-Australia Foreign and Strategic Dialogue in Canberra on Wednesday, Wang said the mutual trust between the two countries will increase and China-Australia relations will move forward, according to a statement released by China's Ministry of Foreign Affairs.
Fitch Ratings Inc. is an American credit rating agency and is one of the "Big Three credit rating agencies", the other two being Moody's and Standard & Poor's. It is one of the three nationally recognized statistical rating organizations (NRSRO) designated by the U.S. Securities and Exchange Commission in 1975.
US Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng participated in discussions addressing the Biden administration's concerns about China's subsidies in industries like solar products, electric vehicles, and lithium-ion batteries, resulting in overcapacity. Both sides agreed to focus on achieving more balanced economic growth and collaborate to combat money laundering in their financial systems.
Top Chinese leader Zhao Leji, chairman of the National People's Congress, will lead a delegation to North Korea from Thursday to Saturday for a goodwill visit marking the opening ceremony for the "China-North Korea Friendship Year." This visit is the highest-level meeting between the two countries since the pandemic began, with North Korean leader Kim Jong Un aiming to strengthen partnerships with China and Russia against the United States. China's significant aid to North Korea plays a crucial role in supporting the North Korean economy.
In investment, the bond credit rating represents the credit worthiness of corporate or government bonds. It is not the same as an individual's credit score. The ratings are published by credit rating agencies and used by investment professionals to assess the likelihood the debt will be repaid.
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