Things are looking better and better for China as it is one of the key growth engines of the world. Moody’s Investor Service has placed the sovereign credit rating of “A1″ on review for a possible upgrade. While this will not happen overnight, the upgrade seems an inevitable event based upon the trends of the world.
Moody’s has had the same investment grade rating since November 2009 after it was raised to “A1″ from “A2″. Moody’s initiated the review on China due in part to the resilience of the Chinese economy. After all, it weathered the global economic meltdown extremely well and growth expectations are higher than just about all nations. China’s stimulus package and its sticking to credit fundamentals have all helped maintain economic stability for the nation. The International Monetary Fund earlier this week put China’s expected growth targets above 10% for 2010 and at 9.6% in 2011.
Hong Kong is also a part of the process. Moody’s placed the “Aa2″ government bond ratings of Hong Kong Special Administrative Region on review for possible upgrade. The “Aa2″ foreign currency bank deposit ceiling and the “Aa1″ foreign currency bond ceiling was also placed on review for an implied upgrade. China’s review was the catalyst, as was the ongoing prospects for continued and improving government financial strength.
Many emerging market nations come with risks on top of opportunity. China is probably now one of the best positioned global sovereign situations out there today.