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MNI China Press Digest Jan 12: Stronger Yuan, Q4 GDP, Exports

MNI (Singapore)

The following lists highlights from Chinese press reports on Wednesday:

  • The Chinese yuan is expected to further strengthen and exceed 6.3 against the U.S. dollar this year, despite the prospect of U.S. interest rate hikes, should China’s exports continue to perform, the 21st Century Business Herald reported citing traders. The yuan is relatively stable at 6.37 against the dollar, despite that the China-U.S. interest rate spread had narrowed to 106 bps, the least since 2021. Regulators should tame be on guard and prevent excessive bets on the yuan gaining, the newspaper said citing Guan Tao, a former FX regulatory official.
  • China’s Q4 GDP may have slowed to about 4% from 4.9% in the previous quarter, rounding out whole-year growth to 8%, Yicai.com reported citing analysts. The average forecast for fixed-asset investment growth in 2021 is 5.29%, among which real estate investment may slow to 5.71% with new projects and home sales dropping significantly amid tight regulations on funding and land supply, the newspaper said. The robust exports helped offset sluggish domestic demand, it said. The increase in imports and exports in 2021 will be about USD1.3 trillion, equivalent to the total increase in the past 10 years, the newspaper said. China releases 2021 GDP data on Monday.
  • China's State Council introduced a new set of policies to boost exports, including improving export credit insurance to help small and medium exporters offset the risk of order cancellations, increase lending and accelerate export tax rebates, the Shanghai Securities News reported. Regulators will keep the yuan basically stable, enhance enterprises’ ability to hedge against forex risks, and actively promote cross-border trade settlement using yuan, the newspaper said.
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