Almost two months after Moody’s Investors Service downgraded China’s government debt rating for the first time since 1989, the country’s bonds, stocks and currency are outperforming the emerging market.
The government securities Moody’s said were less secure? They have seen returns of 2.5% since the downgrade.
Also since the rating announcement, the Shanghai Shenzhen CSI 300 is up 9.5%, versus 3.7% and 2.2% rise of emerging market indices and the S&P 500, respectively.
“I’d say there’s a lot of confidence in China,” Lloyd Blankfein, Goldman Sachs CEO was quoted by Bloomberg as saying after a recent visit. “China is almost an island of stability”