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6 December 2015
Update: China Monthly: Rising challenges will trigger more policy easing in 2016
divergence in monetary policy between China and US
will likely make financing of external debt increasingly
more expensive. According to the BIS data, as of June
2015, China's cross-border borrowings were around
USD1.2trn in Q2 2015. Although it is likely the 3Q
number would have declined, the overall size of short-
term debt remains quite sizeable. Second. China is
likely to continue to face the impossible trinity —
explicit monetary easing through interest rate/RRR cuts
directly conflicts with its FX policy to keep USD/CNY
spot stable, while opening up the capital account. In
our view, the persistent desire to limit CNY weakness
will continue to increase the risk of misalignment in
monetary conditions with fundamentals, increasing
vulnerability to possible policy mistakes and triggering
further capital outflows. We believe the Chinese
authorities will have to be more accommodative to a
weaker RMB so that they can ease monetary policy
more to help the slowing economy.
Limn Liu, Hong Kong, ME
Perry Koiodjoia Hong Kong
Page 6
China: Deutsche Bank forec.5-i .
2014
National Income
Nominal GDP (USD bn)
Population (m)
GDP per capita (USD)
Real GDP (YoY%)'
Private consumption
Government consumption
Gross capital formation
Export of goods & services
Import of goods & services
Prices, Money and Banking
CPI (YoY%) eop
CPI (Yor)61ann avg
Broad money (M2) sop
Bank credit (YoY%) eop
Fiscal Accounts (% of GDP)
Budget surplus
Government revenue
Government expenditure
Primary surplus
External Accounts (USD
Merchandise exports
Merchandise imports
Trade balance
% of GDP
Current account balance
% of GDP
FDI (net)
FX reserves (.00
FX rate (eop) USD/CNY
Debt Indicators (% of GDP)
Government Debt
Domestic
External
Total external debt
in USD bn
Short-term (% of total)
General (VoY%)
Fixed asset inv't (nominal)
Retail sales (nominal)
Industrial production (real)
Merch exports (USD nominal)
March imports (USD
Financial Markets (sop)
1-year deposit rate
10-year yield (%)
USD/CNY
10,357
1,369
7.563
7.3
8.5
4.4
7.2
4.7
2.7
1.5
2.0
12.3
13.4
-1.8
22.0
24.1
-1.4
2,342
1.959
383
3.7
321.3
3.1
208.7
3,899
6.1
37.1
36.9
0.2
8.6
896
69.4
15.7
12.0
8.3
6.0
0.5
Current
1.50
3.18
6.40
2015F 2016E 2017F
10,924 11,218 11,887
1.376
1,382
1,388
7,939
8.115
8,562
7.0
6.7
6.7
7.6
7.7
7.9
7.2
7.2
7.2
6.3
6.1
6.1
-1.2
5.0
5.6
-103
7.2
7.5
1.5
1.8
1.9
1.4
1.8
13
13.6
12.7
12.4
14.7
14.0
13.9
-3.2
-3.5
-3.5
22.5
22.5
22.6
25.7
26.0
26.1
-2.7
-3.0
-2.9
2,281
2,372
2,474
1,648
1,739
1,848
633
633
626
5.8
5.6
5.3
360.5
314.1
297.2
3.3
2.8
2.6
205.0
224.4
237.7
3,470
3.500
3,600
6.4
6.7
6.7
39.6
40.0
40.5
39.4
39.8
40.3
0.2
0.2
0.2
15.5
16.0
16.5
1,693
1.795
1,961
70.0
70.0
70.0
10.6
10.5
10.5
10.6
11.4
11.8
6.3
6.2
6.2
-2.6
4.0
4.3
-15.9
5.6
6.2
18Q1F 1802F 1804F
1.50
1.50
1.00
3.00
3.00
2.80
6.40
6.50
6.70
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Deutsche Bank AG/1-long Kong
CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e)
CONFIDENTIAL
SDNY_GM_00265380
DB-SDNY-0119196
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