ING Flag Upside Risks To Chinese Economy

ING note “there are many opportunities in China for the domestic market in 2023, from consumption to infrastructure, though far fewer for export-oriented industries. Our 5% GDP growth forecast is likely to be revised upward rather than downward. The technology war is going to affect foreign direct investment in China, and China needs to rely more on itself to advance technology. This will put fiscal pressure on some local governments while land revenue will remain less than during pre-pandemic times. As the domestic economy will be stronger than it was last year, while the US economy could be weaker than in 2022, we expect the yuan to appreciate in 2023, with USD/CNY moving to CNY6.50.”