According to Fitch analysts, "the market's pessimism about China's near-term economic prospects is probably exaggerated", even if "it is necessary to face the consequences of a rapid increase in China's debt from 2008 to 2014" and "expectations of the market on the prospects for the growth potential of the country's economy in the medium term could be revised downwards”. This is what we read in a report published today by the rating agency.
"Effects related to a longer slowdown in China - continues the analysis - could have important implications on the rating at regional and global level". Fitch also notes that the moves decided by the Chinese Central Bank "they note the political flexibility of the authorities in support of the economy", while the Chinese authorities still have "an important space to further ease their monetary policy".
Furthermore, the Beijing government "still has substantial fiscal resources at its disposal", continues Fitch, noting that demand and production "do not signal an extraordinarily fast, disorderly and broad deceleration" and "consumption and the labor market remain robust, even if the data are weaker in terms of exports, investments and production”.
However, the agency notes that "it is important to underline that the Chinese structural economic policy has been deliberately moved away from investments and exports towards internal consumption". Finally, in the medium term, Fitch continues to estimate "a prolonged period of lower growth for Chinese GDP, expected at a 'normal' level probably well below 7 percent".
