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November 10, 2009

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Home » Business » Economy

Mainland outlook rated 'positive'

MOODY'S Investors Service has raised the Chinese mainland's ratings outlook from stable to positive due to the country's strong economic performance, the ratings firm said yesterday.

The action applies to the government's A1 foreign and local currency bond ratings.

Moody's also raised its outlook on Hong Kong's Aa2 rating to positive from stable. Analysts said both moves were justified and came as little surprise.

"The Chinese authorities are successfully steering the economy through the turbulence of the global financial crisis and recession," Tom Byrne, a Moody's senior vice president, said yesterday. "Furthermore, they seem likely to remain vigilant to protect systemic stability from future threats and challenges."

The Chinese mainland's economy expanded 8.9 percent in the third quarter compared with a year ago, up from a rise of 7.9 percent in the second quarter and 6.1 percent in the first.

The mainland is scheduled to post its key economic data for October tomorrow. Citic Ka Wah Bank Chief Economist Liao Qun said he expects the figures to provide fresh evidence of economic recovery.

"Exports are likely to show narrowing declines, and retail and investment should grow," Liao said. "The relaxed monetary policy is expected to continue into the first quarter of next year to secure growth momentum."

When, at the beginning of the year, China announced its target for 8 percent growth in gross domestic product, many economists were skeptical. Now, however, most analysts said they think China can achieve its ambitious aim.

Last week, the World Bank raised its forecast for China's economic growth for this year to 8.4 percent from 7.2 percent.

Also yesterday, the ratings agency lifted from stable to positive the credit outlook for seven Chinese banks: the Industrial and Commercial Bank of China, China Construction Bank, the Bank of China, the Agricultural Bank of China, China Development Bank, Export-Import Bank of China and Agricultural Development Bank of China.


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