Recently, Moody's downgraded the outlook for China's national sovereignty and the rating of many state-owned entities again, which is unprecedented in terms of quantity. These downward revisions include not only domestic units in China, but also Hong Kong and Macau. This series of actions has given rise to widespread speculation and interpretation. Most people believe that Moody's is doing this to short China, to the dollarCut interest ratesand large-scale capital inflows into China. However,Wall StreetOne of the experts gave a very different interpretation, which is shocking. He believes that Moody's does not have that much ambition and ability, it is just a money-making institution. So, why did Moody's do this?The answer lies with ChinaDebtsituation and itsDebtThe way to defuse.
In order to make money, what Moody's really intends to do is actually ChinaDebtA unique one in the process of resolutionBusiness opportunities。Currently, China'sDebtThe scale is already so large that it has to be resolved. *** and place onlyDebtThe total amount is more than 60 trillion. In accordance withWall StreetIt is not feasible to print money directly, so there are two more appropriate ways.
One way is to combine theseDebtPack it up and put it on the market. This may be a little incredible for us Chinese, but in the United Statesfinancial system, similarFinanceProducts have become very common, such as subordinated bonds. By packing theseDebtAnd carry out a secondary transfer, which can diversify the risk.
Another way is to issue new debt to pay off old debt. This approach has already been implemented in China, and it has worked well, successfully alleviating the localityDebtCrisis. However, there are still some problems with the fact that the size of the issuance is still relatively small. If you say 60 trillionDebtOnly one or two trillion new bonds have been issued, then this can only be regarded as a drop in the bucket.
Thus, according to the expectations of the Americans, in 2024 China will issue a larger oneBonds。And Moody's smelled itBusiness opportunities。Because it doesn't matter if it's packedDebtListing, or the issuance of new bonds, needs to have sufficient market demand. At present, many countries have issued bonds globally, the most typical example is:U.S. Treasuries。Considering that China wants to dissolve such a huge oneDebtscale, if all dependent on the domesticInvestmentsThat may not be realistic, and it will inevitably need to go abroadInvestmentsissued bonds. This brings us to the international levelCreditproblems. As a result, Moody's quickly downgraded the ratings of China** and state-owned units, on the one hand, to prevent them from issuing bonds on a large scale in the international market, which is where the United States ** is looking for fees. On the other hand, for many units in China, if they want Moody's to upgrade their ratings, they will have to pay for them. Therefore, what Moody's is doing is a kind of rogue business, collecting money from both ends, and don't think too much of the American capitalists.
ChinaDebtThe scale is huge, and there is an urgent need to find a solution. Moody smelled itBusiness opportunities, ready to profit from it. InWall StreetExperts' analysis, ChinaDebtMitigation can be done in two ways.
The first way is to willDebtIt is packaged and listed on the market. This way is actually not uncommon, the United StatesFinanceThere are many similar ones in the marketFinanceProducts do this, such as subordinated bonds. By willingDebtPackaging and reselling can diversify the risk and attract moreInvestmentsget involved.
The second way is to issue new debt to pay off old debt. This approach has already been implemented in China and has achieved certain results, successfully alleviating the localitiesDebtCrisis. However, it has not yet been completely resolvedDebtproblem, the issuance size is also relatively small. ChinaDebtIt has already exceeded 60 trillion yuan, and the scale of new bonds issued is only one or two trillion yuan, which obviously cannot fundamentally solve the problem.
TheWall StreetExperts believe that in 2024 China will issue a larger oneBondsto resolve itDebt。That's what Moody's valuesBusiness opportunitiesLocation. Whether it is a packaging listing or the issuance of new bonds, the most important thing is that there is a market demand. Many countries' bonds are issued globally, and China wants to successfully resolve themDebt, you need to attract foreign countriesInvestmentsparticipation. And the rating of the rating agency is directly related to the internationalCredit。Therefore, Moody's downgrading means blocking the large-scale issuance of bonds by China** and state-owned entities in the international market, which is where they want to charge the United States**. For China's state-owned entities, if they want Moody's to upgrade their ratings, they will need to pay a corresponding fee. So, what Moody's is doing is only to make money, not to short China.
China is currently facing a huge situationDebtSolving this problem is the key to national development. Moody's takes advantage of ChinaDebtThe process of resolving found a feasible oneBusiness opportunitiesand try to profit by downgrading the rating.
ChineseDebtThe solution can take the form of packaging listing and issuing new debt. Both methods have their own advantages and disadvantages, which need to be weighed and selected according to the actual situation. Either way, market needs to be taken into account and internationalCreditproblems. In fact, China is already starting to implement a strategy of issuing new bonds, and it has achieved some results. However, due to the relatively small size of the issuance, there are still significant challenges.
In response to these problems, China** needs to be more proactive, and at the same time, it needs to learn from international experience and expert advice. For example, it can be further expandedDebtpackaging listed range, attracting moreInvestmentsto diversify the risk. At the same time, for the issuance of new bonds, we can moderately increase the scale and pay attention toDebtRational arrangement of the structure. In addition, the establishment of a soundFinancemarkets and rating agencies to enhance China's internationalizationCredit, which is also a very important aspect.
Finally, to solve the Chinese oneDebtProblems require a long-term process and the joint efforts and wisdom of the whole society. **Enterprise,FinanceInstitutionsInvestmentsand rating agencies should work together to form a synergy and jointly promote ChinaEconomyHealthy development.
In the face of Moody's downgrade of China's rating, we must not be too pessimistic and panicked, let alone fall into emotional rhetoric and actions. On the contrary, we should look at the problem objectively and rationally, recognizing:DebtThe severity and complexity of the problem, find a reasonable and effective way to solve it, and comprehensively promote ChinaEconomyof high-quality development.
In short, Moody's is only pursuing its own interests in the process of downgrading China, not shorting China. We should be based on thisWall StreetAccording to experts, Moody's downgrades the rating outlook of China's national sovereignty and many state-owned units is not to short China, but to findDebtin the process of resolutionBusiness opportunities。ChineseDebtThe scale is huge, and a solution needs to be found, and Moody's sees the issuance of bondsBusiness opportunities。They can downgrade their ratings to prevent Chinese entities from issuing bonds on a large scale in the international market, while also requiring Chinese entities to pay fees to improve their ratings. This practice allows Moody's to collect money from both ends and pursue its own interests.
In addition, to solve ChinaDebtThe problem needs to be taken in a packageDebtListing and issuance of new debt. Moody's downgrades can discourage entities from issuing bonds in international markets, so for Chinese** and state-owned entities, payments will need to be made if they want Moody's to upgrade. This practice can help Moody's accessProfits
Against ChinaDebtThe problem should be viewed objectively and rationally, according to market demand and internationallyCreditConductedDebtResolve. **Proactive measures need to be taken, drawing on international experience and expert advice to advance ChinaEconomyhealthy development. In the face of Moody's downgrade, we should not be too pessimistic and panicked, but should find a reasonable and effective way to promote China in an all-round wayEconomyof high-quality development.