Some are speculating that the next salvo in the Trump administration’s efforts to hurt China’s economy could be foreign exchange intervention to force up the value of the renminbi. Such efforts would most likely prove fruitless as they could easily be fended off by the People’s Bank. Meanwhile, Chinese officials appear to be taking steps to prevent fiscal conditions from tightening in the coming months. This should help shore up infrastructure investment but is unlikely to fully offset broader economic headwinds.
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