C O L U M N S

BEIJING (AFP) - Moody’s on Monday upgraded its ratings outlook for China to “positive” from “stable”, giving policymakers in Beijing the thumbs-up for how they have navigated the worst financial crisis in decades.
Moody’s Investors Service said it had based its decision on the “resilient, robust and relatively stable macroeconomic performance during the turbulence of the past year”. “The Chinese authorities are successfully steering the economy through the turbulence of the global financial crisis and recession, and furthermore, they seem likely to remain vigilant to protect systemic stability from future threats and challenges,” senior vice president Tom Byrne said in a statement. Policymakers and analysts have expressed confidence in China’s recovery after the economy grew 8.9pc in the third quarter — the fastest pace in a year.
That compares with 7.9 percent growth in the second quarter and 6.1 percent in the first three months, the slowest pace in more than a decade.
The World Bank last week raised its 2009 growth forecast to 8.4 percent, following similar moves by the International Monetary Fund and the Asian Development Bank.
China’s recovery has been driven by a four-trillion-yuan (586-billion-dollar) stimulus package unveiled a year ago and a record 8.67 trillion yuan in bank lending in the first nine months of 2009.
But Moody’s sounded a cautionary note, saying that while China’s recovery seemed well-established, underlying risks to its long-term outlook remained. “Further positive rating actions ... will hinge on continued macroeconomic and financial sector stability and on an assessment that China’s state-sector-centric stimulus programme had not distorted long-term growth prospects or given rise to destabilising asset bubbles,” the statement said.