We expect growth to slow further in the short term but look for a gradual recovery during 2019 on the back of more stimulus and a trade deal.
The ceasefire in the trade war is good news and we believe it paves the way for an end to the US-China trade war in 2019.
We look for more policy easing next year and for USD/CNY to rise to 7.20 in 12 months, giving support to exports.
A further escalation of the trade war is the main short-term risk for China. Debt and property markets are still medium-term risks.
2018 is the 40-year anniversary of the 'reform and opening' policy. China has taken steps to speed up opening for investments and trade.
We expect China to continue the catching-up process and to surpass the US economy by 2030. A long-term rivalry with the US has only just begun.
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