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China downgrade not a problem for Airbus

Wednesday, March 02, 2016 - 01:41

Moody's has downgradeed its outlook on Chinese government debt to ''negative'' from ''stable'', because of worries about economic reforms, rising government debt and falling reserves. But as David Pollard reports not everyone is negative on China.

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If Asian markets are shrugging off fears over growth in China, they're not the only ones. Airbus is adding to its Tianjin facilities with a new completion plant for its A330 plane. It and rival Boeing announced 3 billion dollars of orders at last month's Singapore airshow. Just a fraction of the haul from the same show two years previously. CEO Fabrice Bregier, though, is looking to the future. (SOUNDBITE) (English) AIRBUS CEO, FABRICE BREGIER, SAYING: "We believe that for the next five years, plus 10 percent growth year-on-year, in already the second biggest market in the world, meaning it's extremely important, is a very cautious assumption." Moody's is less optimistic. The debt ratings agency downgrading its China outlook to negative. Citing uncertainty over reform, rising government debt, and falling reserves. Even that doesn't seem to have unsettled equity markets. Those posting strong gains on upbeat data from Australia, Switzerland and the US. While choosing to ignore a sharp fall in South Korea's factory output and exports as China's slowdown bites. But even in China, some sectors are doing OK, says IG's Alastair McCaig. (SOUNDBITE) (English) IG MARKET ANALYST, ALASTAIR MCCAIG, SAYING: "Maybe the buying isn't of the same sort of frenzied nature that we've seen in the last couple of years, but nonetheless I think growth in that sort of area - the likes of tourism and luxury goods - is still going to remain." Airbus expects China to need over 5,000 new aircraft over two decades - Asia as a whole nearly 13,000. Its confidence in the region high - though with over two trillion dollars of potential revenues at play - so too are the stakes.

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China downgrade not a problem for Airbus

Wednesday, March 02, 2016 - 01:41