5 years ago

McGinagall expects China will push policy valley economic growth “guarantee 6” RMB will not “wear 7”

1 min read
chinese economy

China-US trade disputes continue and heat up, and economists estimate that China’s economic growth will slow down by 0.3 to 0.4 percentage points, but China’s introduction of economic stimulus policies is enough to offset the related effects. It is also believed that after considering the impact of the trade war on the economy and the stock market, the two countries will eventually reach a trade agreement.

Hu Weijun, the chief economist of Macquarie Greater China, said that the Chinese government’s bottom line for maintaining economic growth of 6% does not rule out that China’s monetary policy will turn in the second half of the year, from neutral to expansion. Although the RMB exchange rate is inevitably under pressure, when the RMB depreciation tends to occur at the same time, capital outflows will have a negative impact on the Chinese economy. However, he does not think that the renminbi will “have a huge depreciation”, and the chance of falling below 7 is not big. It is expected that the volatility in the 6.5 to 6.9 range is more likely.

“It is impossible to use the US debt as a bargaining chip.”

For China to sell US debt in March, Hu Weijun believes that China cannot use the sale of US debt as a counter-attack to the United States, because China’s foreign exchange reserves need to invest, and US debt is a stable asset.

Hu Weijun is optimistic about the outcome of the China-US negotiations and believes that the two countries will eventually reach a trade agreement.

Don't Miss