Deutsche Bank: Mainland growth slowed to 6.4%

Zhou Hao, senior Asia economist at Commerzbank, said he expected the short-term de-leveraging in the Mainland would weaken the economy. It is estimated that the economic growth in China will be 6.4% this year, down from 6.7% last year’s forecast to 6.8%. In his opinion, the mainland economy will experience short-term fluctuations and a long-term stability trend. However, if the mainland economy is to develop healthily, it will need to change the perception of mainland investors that “the risk is equal to high returns” in the future.

This year continued tight control lever

He estimated that due to the central tendency to go bubble, this year will be a year of major changes in regulatory measures to achieve deleveraging through tougher regulation. Therefore, he estimates that PBOC monetary policy will be tighter this year with interest rates upwards Trend to control credit risk, but does not mean a substantial rate hike.

In respect of the mainland property market, he believes real estate has weakened the economic importance of the Mainland. Real estate policies tend to be subject to policy and fine-tuning in the cities. The major policy directions will remain unchanged. Coupled with the low return on rental income in the first-tier cities in the Mainland, only about 1.3% to 1.4% , The lack of incentive to invest in the property market and the booming stock market have also affected public sentiment towards the property market. However, property prices in the Mainland are not expected to fluctuate slightly in this year and even have a chance of falling.

He believes the performance of the basket of currencies will be stable against the trend of the renminbi. It is estimated that by the end of this year, the exchange rate of the U.S. dollar against the renminbi will hover around 6.8, and the bidirectionally floating feature is even more remarkable.

Zhou Hao believes that the central government is intent on decoupling monetary policy and exchange rate policy, the RMB index remained relatively stable; the People’s Bank no longer adjust the counter-cyclical factor in order to make the market can not be one-way RMB trend estimates, but also hope that the volatility of the renminbi Greater than the bank 2% to 3% spreads.