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Macro Comment China

Macro Comment China — China lowers growth target and eases fiscal policy

By lowering the growth target and at the same time announcing growth stimulus, the authorities clearly acknowledge the current weak stance of the economy. Renewed focus on fiscal instead of monetary policy easing bodes well for the fight against excessive credit.

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

Macro Comment China — Currency stability entering trade talks

China seems ready to promise some sort of currency stability as part of a broader trade agreement with the US. This supports our long-held view that China will continue to keep its currency generally stable in effective terms.

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

Macro Comment China — Temporary stabilisation from stimuli

Growth is slowing and more headwinds lie ahead. Further stimulus measures will most likely be implemented, but the room for policy easing is more limited than earlier. We expect stimuli to stabilise growth temporarily later this year, but see growth slowing again into next year.

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

Macro Comment China — We expect the CNY to strengthen gradually

Following a marked CNY weakening over the summer, we now expect the CNY to strengthen gradually, as we believe China's authorities will stick to their goal of keeping the CNY "basically stable".

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

Macro Comment China — Stimuli not enough to avoid further slowdown

Economic growth in China is slowing due to trade war fears and previous deleveraging efforts. Stimuli have been announced and more are likely to come. These measures will mitigate but not avoid the growth slow-down, as it is now more difficult than it was previously to stimulate the economy.

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

Macro Comment China — No more CNY weakening expected

Following a marked CNY weakening over the summer, we do not expect much more weakening before re-newed strengthening sets in. Currency depreciation is not China's preferred weapon in the trade war, and we see signals that the authorities, if anything, are working for a stronger rather than weaker CNY. 

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