Moody's: China's consolidation of power could advance economic rebalancing, though challenges remain
The latest from the ratings agency on China
- Moody's Investors Service says that the further consolidation of power under President Xi Jinping - as outlined at the conclusion of the 19th National Congress of the Chinese Communist Party earlier this week - could advance the process of economic reform and rebalancing, because one obstacle to reform has been the misalignment of incentives between the central leadership and other officials.
- "However, it remains unclear as to whether this increased centralization of authority will result in an acceleration of the pace of reform, or a continuation of the careful balancing of policy objectives in recent years, such as maintaining relatively strong growth and the strong role of state-owned enterprises," says Michael Taylor, a Moody's Managing Director and Chief Credit Officer for Asia Pacific.
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- China will likely reach its target of doubling per capita income by 2020 from the level in 2010
- Moody's expects added focus on quality of growth in china will result in greater emphasis on promoting productivity, reducing financial vulnerability
