China's economy is displaying remarkable momentum as leading industrial enterprises reported accelerated growth in April, according to official data released on Tuesday. This positive trend suggests that the economy is demonstrating significant resilience, even amidst ongoing trade tensions.

Experts and government officials attribute this encouraging performance to the effective implementation of stimulus policies designed to mitigate the impact of tariff increases imposed by the United States, as well as to stabilize market expectations.

The affirmation of China's long-term credit rating at A1 by Moody's Ratings on Monday further supports this narrative, despite the rating being accompanied by a negative outlook. The A1 rating, which sits four notches below the top classification on Moody's scale, indicates a low risk of credit default.

While the negative outlook persists, the decision to maintain the A1 rating reflects unwavering confidence in China's medium- to long-term economic fundamentals. Moody's noted that China's vast and dynamic economy, coupled with its capacity for innovation, were key factors in this assessment.

Looking ahead, economists predict that China's economy will remain stable through the third and fourth quarters. This prediction is bolstered by the ample policy tools available to counter external uncertainties, alongside a strong need for fiscal stimulus to elevate domestic demand and bolster business confidence.

Statistics from the National Bureau of Statistics indicate that profits among China's larger industrial enterprises — those generating at least 20 million yuan in annual revenue — experienced a year-on-year increase of 3 percent in April, surpassing the 2.6 percent growth recorded in March.

In the first four months of 2023, industrial profits reflected a year-on-year rise of 1.4 percent, a notable improvement from the 0.8 percent increase witnessed in the first quarter. This rebound is primarily driven by robust earnings in the equipment manufacturing and high-tech sectors, supported by proactive macroeconomic policies.

Moreover, Moody's acknowledged an enhancing quality of growth in China, citing improvements in various innovation metrics and the expansive use of artificial intelligence, which are expected to play a pivotal role in driving productivity growth more effectively.

In contrast, earlier this month, Moody's downgraded the U.S. sovereign credit rating from Aaa to Aa1, highlighting concerns regarding rising government debt and interest obligations. The Ministry of Finance in China responded positively to the affirmation of the A1 rating, describing it as a favorable assessment of the national economic outlook.

The ministry emphasized that China's economy demonstrated strong resilience amidst a challenging global landscape characterized by geopolitical tensions and fluctuating trade dynamics. Looking forward, a coordinated application of existing policy measures is anticipated to underpin high-quality economic development.