Chinese Finance Minister Lou Jiwei is unfazed by the decrease in sovereign credit ratings per a U.S. ratings agency, citing that the agency did not consider the Asian country’s stable economy.
The rating from the New York-based Moody's Investors Service indicated that China's economy has been downgraded due to "inadequate capability to carry out reforms" and an increase in the country's debts, China Daily reported.
Because of this, China was included in the list of countries whose sovereign credit ratings had been downgraded from "stable" to "negative," joining Greece which entered the list in Sept. 2015.
Despite these findings, the finance minister remained confident about his country's economy and strongly expressed his opinion during an event in Beijing.
"Internationally, there have been no other actions against China, such as selling short. I do not care particularly about such rating," Lou said during the China Development Forum held in Beijing on Sunday covered by CCTV News.
He further explained that the ratings company neglected to include some of China's impressive efforts to cut overcapacity and to deleverage by allotting over 1 trillion yuan to achieve it.
According to CRIEnglish, the budget will be used for relocation of employees and other measures to support the structural reforms, such as the replacement of business tax with Value Added Tax for the finance, construction, and services sectors, which will take effect in May.
These reforms, he said, would benefit over 10 million taxpayers and would save more or less 50 billion every year.
Lou also believes that the country's economy is in a good state, with the market seeing no change in the index linked to sovereignty debt.
He further said that China's offshore RMB exchange rate performed well and increased for the past few months.
Meanwhile, China iValley Research Institute's chief economist Liang Haiming believes that the ratings from Moody's can be quite a stretch from reality, adding that the company "used double standards" to come up with such ratings.