Moody's downgrading report questionable

International credit rating agency Moody's Investors Service recently downgraded China's sovereign credit rating from Aa3 to A1, which may have some negative influence on China-funded organizations issuing bonds or financing projects in overseas markets in the next few years. Moody's is one of the three dominant credit rating agencies in the world and has plenty of experience in collecting information on credit rating.

But its downgrading of China's credit rating exposes it lacks understanding of the Chinese economy's growth opportunity, the potential of the country's supply-side structural reform, and the relevant management policy the Chinese government is implementing.

As an emerging market economy, China is undergoing transition and is expected to bottom out after the economic downturn that started in 2011. And since China's economic situation is different from other economies, Moody's downgrading is questionable.