Downward pressure on yuan has eased - UOB

Analysts at UOB Group explained that the IMF raised its estimate for China’s average annual growth rate for the period of 2017-2020 to 6.4% from 6.0% estimate a year earlier but warned that it would come at the cost of rising debt that increases medium-term risks to growth.

Key Quotes:

"It estimates that the household, corporate and government debt will increase to almost 300% of GDP by 2022 from 242% last year. The IMF said China should accelerate reforms to avoid risk of sharp growth adjustment in mid-term and that it should resume progress towards market-driven, flexible exchange rate. It noted that downward pressure on yuan has eased on strong economic growth and capital controls.

China Commerce Ministry said that China is continuously strengthening administrative, judicial protections for intellectual property. It will adopt all appropriate measures to defend China’s interests in response to US probe and take steps if US takes actions that hurts bilateral trade relations. US should strictly observe trade promises, not become “destroyer of multilateral principles”."