Moody's: China reforms create progress

In its annual report on China, Moody's Investors Service said its A1 ratings and stable outlook reflect hugely successful reforms that have rapidly raised national income, propelled China's exports to the second largest in the world and boosted official foreign exchange reserves to the largest in the world.

China's foreign-currency country ceiling for bonds and notes also is A1, as is the local-currency bond ceiling, which is the highest possible rating that could be assigned to obligors and obligations denominated in reminbi, Moody's said.

The progress made so far in the restructuring and modernization of banks and state-owned enterprises has reduced underlying public-sector fiscal weaknesses and has strengthened the government budget, the agency said.

Further reform is needed, however, to reduce financial market distortions, the agency added.

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