Bloomberg News

China Has Defenses Against Europe Contagion, Moody’s Byrne Says

November 07, 2011

Nov. 8 (Bloomberg) -- China has defenses to cope with any contagion from the euro area’s debt crisis, including a high savings rate, a current account surplus and a central government that is spending within its means, Thomas Byrne, a senior vice president for sovereign risk at Moody’s Investors Service said.

“Indirect and tail risks,” such as those from disorderly sovereign defaults or a collapse in growth in Europe coupled with banking crises that ripple globally, would have a bigger impact, Byrne said at a conference in Beijing today.

The crisis has “limited” risks to China’s growth although it is a “headwind,” he said. Moody’s estimates China will expand 8.5 percent next year.

China’s banks have limited exposure to Europe, he said.

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