Moody's questions the efficacy of China's stimulus

The ratings agency Moody's is out on the wires questioning the efficacy of China's future stimulus programs in buttressing the economic growth. 

Key quotes

  • It's not the question of China being able to provide for the stimulus, but really the effectiveness of it. 
  • The government will try to use as much selective stimulus to keep the economy on a good trade. They could cut the reserve requirement ratio again and implement tax cuts. 
  • The challnge lies in ramping up consumer spending, given the high levels of household debts. Corporate debt load is also high. 
  • Local governments are strapped with debt. 

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