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Macro Comment China

Macro Comment China — CNY to be kept stable, but only in effective terms

We revise our USD/CNY forecast after seeing signs of Chinese authorities being less worried about CNY weakness, and on the back of revisions to our USD forecast. Our underlying view of a stable effective exchange rate is unchanged and we continue to expect a weakening of the CNY versus the USD in the short term, but a stronger CNY in the long term.

Bjarke Roed-Frederiksen, Senior Economist | bjro03@handelsbanken.dk

Macro Comment China — China Trip 2017: Healthy growth leaves room to tackle overcapacity

• Our travel notes: we left China more positive than we arrived
• Party congress will consolidate President Xi's power
• Cutbacks in China finally rebalance commodity markets

Martin Jansson, Strategist | nija03@handelsbanken.se

Macro Comment China — An expected stronger USD means a weaker CNY vs. USD

We revise our USD/CNY forecast following an unexpected general USD weakening over the summer and an appreciation of the CNY versus the USD. Our underlying view of a stable effective exchange rate is unchanged and we still expect a weakening of the CNY versus the USD in the short term, but a stronger CNY in the long term.

Bjarke Roed-Frederiksen, Senior Economist | bjro03@handelsbanken.dk

Macro Comment China — We expect a weaker CNY vs. USD, but only temporarily

The marked strengthening of the CNY versus the USD in late May prompts us to lower our short-term USD/CNY forecast. Revisions to our house view on the general USD strength also imply revisions to our CNY outlook. However, our underlying view is unchanged and we still expect a weakening of the CNY versus the USD in the short term, but a stronger CNY in the long term.

Bjarke Roed-Frederiksen, Senior Economist | bjro03@handelsbanken.dk

Macro Comment China — Revised USD/CNY forecast; effective CNY stable

China's authorities seem more committed than earlier to their pledge of keeping the effective exchange rate "basically stable". Our new forecast of a generally stronger USD in the short run but weaker in 2018-19 should translate into a weakening of the CNY versus the USD in the short term, but a stronger CNY in the longer run.

Bjarke Roed-Frederiksen, Senior Economist | bjro03@handelsbanken.dk

Macro Comment China — China’s economic growth is no longer overstated

We introduce our new Handelsbanken China Macro Index, an alternative measure of economic activity in China that seeks to measure the 'true' pace of economic expansion. The index indicates that growth in Chi-na picked up in 2016, especially since early in the summer, and is now close to the officially-reported GDP growth figure of 6.7 percent y-o-y for Q3. The index also indicates that official growth numbers over the last two years have overstated actual growth by one to two percentage points.

Bjarke Roed-Frederiksen, Senior Economist | bjro03@handelsbanken.dk