The “Two Sessions,” or annual political meetings of China’s National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), started in Beijing on March 3, 2016.
The meetings main focus is economic issues as well as former political commissar Liu Yuan.
China’s economy continues to hit new lows. The latest official Purchasing Managers’ Index (PMI) and the Caixin PMI have both fallen, indicating a prolonged slump in the industrial sector.
The stock market has encountered three crashes in 6 months. The currency is fluctuating significantly, and capital outflow continues to get worse. All of this increases the risk of China’s economy.
The international credit rating agency Moody’s Investors Service lowered the outlook on China’s credit rating from “stable” to “negative” and cited three problems encountered by China, which highlighted the challenges faced by the world’s second largest economy.
A number of mainland Chinese enterprises also face the risk of being downgraded, and the downgrading tide could happen at any time. The outside world predicted that the Two Sessions would be shrouded by many economic problems.
Before the Two Sessions, the international community cast a no-confidence vote on China’s economy.
Bloomberg reported that Moody’s downgrading rating on China highlights the growing concern among global investors. China will struggle to overhaul Asia’s largest economy at a time when capital outflow is getting worse and debt levels have climbed to an unprecedented 247 percent of gross domestic product.
Capital outflows bring risks for policy, currency and economic growth. In the past 18 months, there has been a significant decline in China’s foreign exchange reserves.
