The deputy director of the State Council Development Research Center, Wang Yiming, said during the 2018 International Monetary Forum last weekend that Chinese currency yuan remains relatively stable compared with other emerging economies, and the impacts of trade tension are expected to be limited.
The 2018 RMB Internationalization Report, released during the forum, also showed that the yuan’s globalization effort maintains its stable footing in the international monetary system. The report credits the stability to China’s steady economic growth, the launch of the Belt and Road Initiative, and the opening-up of domestic financial markets.
Some are concerned that the ongoing trade tensions would impact the currency. “The impacts on growth, employment and export are expected to be limited,” Wang said, but admitting that trade tension will be a key factor to watch during the second half of the year.
Moreover, China’s ongoing deleveraging efforts should be strengthened throughout the remainder of this year, based on Wang’s words.
“Generally speaking, in the first five months of 2018, domestic demand showed slight signs of pacing down and resulted in a certain level of differentiation between demand and supply. In terms of supply, industrial and services sectors continued steady and robust growth. And for demand, investment and consumption inched down a bit,” Wang said.