- "Mainland China’s economy continued to forge ahead in May on the back of strong domestic and external demand, with both investment and consumption climbing at double digit rates. Inflation also moved higher. While the recent spate of wage hikes on the Mainland would exert upward pressure on prices in the longer term if there is no corresponding increase in productivity, consumer price inflation is expected to decelerate in the coming months as food and world commodity prices show signs of easing."
- "The persistent surge of the Mainland’s exports in May amid growing uncertainty in the European economy also raised hopes that the potential impact of the European debt crisis on global trade might be less severe than expected. However, with most of the European countries planning for spending cuts and tax hikes in the months ahead to restore fiscal discipline, mainland China’s exports are bound to advance more slowly going forward."
- "The People’s Bank of China announced on 19 June that it would increase the flexibility of the RMB and re-peg it to a basket of currencies, thus effectively ending the US dollar-RMB peg. It also stated explicitly on 20 June that there would be no one-off revaluation of the RMB against the US dollar. Mainland China has been holding the RMB steady at about 6.83 to the US dollar since mid-2008 in an attempt to cushion the economy from the global financial crisis."
- "Under the new arrangement, there is likely to be more day to day volatility in the US dollar-RMB exchange rate. It also implies that the RMB could appreciate or depreciate against the US dollar. Despite the change, however, we maintain our forecast that the RMB would gradually appreciate, reaching around 6.65 versus the US dollar by the end of this year, or an appreciation of about 2% from its current level."
HangSeng China Economic Monitor June2010
No comments:
Post a Comment