ANZ maintains view that "China's growth.......>

CHINA: ANZ maintains view that "China's growth will slow in H2 after the

outperformance in H1." ANZ suggests that "stricter regulations over

infrastructure and property investment may also weigh on the growth outlook.

Structural deleveraging, instead of broad-based deleveraging, will elevate

credit risks in some sectors in H2."

- ANZ look for "another 50bps PBOC RRR cut in Q4 2018. With structural

deleveraging now the policy focus, tightened controls over fund flows will focus

on specific sectors, including real estate and LGFVs."

- ANZ also expect that "bond issuance by local Chinese governments will likely

increase in H2 2018, even though they had targeted an unchanged deficit of

CNY830bn from 2017 in their general budget."

- ANZ highlight that "at this stage, there are no signs of outflow pressures

emerging, unlike in 2015 - something the authorities are keen to avoid. Should

trade tensions escalate, further bouts of CNY weakness are likely, especially if

they start to materially impact China's growth in H2 2018."