Bank says China GDP growth to slow to 6pc

Business | 11 Jan 2019 4:03 pm

UBS forecasts that the GDP growth in China would slow down from 6.5 percent in 2018 to 6 percent in 2019.

It is expected that more value-added tax cuts and infrastructure boosting policies will be announced during the National People's Congress in March, said Min Lan Tan, head of chief investment office APAC at UBS global wealth management.

However, she added that property easing would be the last thing the mainland government would consider as a tool to live up to its GDP target since it is still working on deleveraging.

She analyzed that yuan's strength over the past few days was just a result of dollar weakening, and yuan is basically moving up against other currencies.

During the near term, yuan would not breach the level of 7, while in the longer term, 7 would not be a significant anchor, she added, for China itself also wants to see the yuan depreciate.

As for Hong Kong, she said that the governments in Asia, including the city's, are cautious about capital flows, and expect money to be invested in the right way, so the local property market is likely to see 10-15 percent correction, which will not be a major slump.

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