China's finance minister addresses ratings downgrade
Chinese Financial Minister Lou Jiwei said on Friday that the downgrading of China's economic outlook "doesn't reflect the reality" of the Chinese economy.
Lou made his comment at a press conference in Washington where he led a meeting of G20 finance ministers and central bank governors including US Treasury Secretary Jack Lew and Federal Reserve Chair Janet Yellen, and where he is also attending the spring meetings of the World Bank and the International Monetary Fund. China will host the G20 summit in September in Hangzhou.
Before taking questions at a news conference, Lou first shared key points of a communique reached by his G20 colleagues on issues including infrastructure, the international monetary system, terrorist financing, green investment and climate change.
When asked for his reaction to Standard & Poor's and Moody's downgrade of China's credit outlook rating to "negative" in March, Lou said, "I do not think it reflected the reality of Chinese economy. We just released the GDP growth rate of the first quarter at 6.7 percent, still within our expectation."
"I do not blame them though because they do not know the specifics of Chinese economic situation," he said. "I hope they can have more communication with the countries that they rated, which will help them come to a more comprehensive conclusion."
Lou also commented on the IMF's decision to set the projection of China's 2016 GDP at 6.5 percent in its newly released World Economic Outlook, which is lower than the first quarter's actual number.
"IMF has their own way of reasoning. They might have seen some of the measures we introduced on the demand side. But we are also making great stride on the supply side structural reform, which over the long term will help to sharpen the path of growth," Lou said.
Lou said China has taken two important steps to rebalance its economy: deregulation and market-oriented price correction.
"Others may not see the benefits of these two reform areas, but I know it's going to have very crucial and positive impact. It just speaks to the fundamental laws of economics," said Lou.
Calling the Washington meeting a great success, Lou said he is looking forward to the G20 in China, the first for the country.
"How to evaluate the outcome of China's economic reform is indeed a big issue," he said, "I, however, have confidence."
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