(In brief) from Goldman Sachs
Expect China to continue reform efforts to reduce the risks built up during growth phases
- China to maintain "broadly stable monetary policy"
- Economic reforms should accelerate
- Targeted tightening to ease financial risk and address concerns on the environment, Likely to continue efforts to curb leverage in shadow banking, restraints home-price appreciation in first- and second-tier cities
- Watch for some small loosening of capital controls - this is quasi-fiscal support
On inflation and yuan:
- Still strong economic growth along with -higher food prices should boost CPI (up toward top end of government target range)
- GS sees minor yuan depreciation on a trade-weighted basis ... "implemented opportunistically during any bouts of dollar weakness and with only modest effects on capital flows given tighter controls."