Date
18 October 2017
Ba Shusong expects China to maintain a strong grip on the renminbi exchange rate. Photo: HKEJ
Ba Shusong expects China to maintain a strong grip on the renminbi exchange rate. Photo: HKEJ

Worst is over for Chinese economy: HKEx economist

Ba Shusong, chief economist at Hong Kong Exchanges and Clearing Ltd. (00388.HK) said the Chinese economy is past its worst period and has entered a phase in which its rate of growth will vary within a narrow range.

He said the bottom of the downtrend, however, is expected to come at the end of this year or early next year, the Hong Kong Economic Journal reported Thursday.

The country’s fiscal and monetary policies will continue to support economic growth, but it is unlikely that the authorities will further loosen their stance on monetary policy given their intention of ensuring the reduction of excess capacity in traditional industrial sectors.

Meanwhile, the government has to make sure the balance between economic growth and price increases doesn’t let loose a rise in inflation.

Ba expects the country to maintain a strong grip on the renminbi exchange rate, pegging it against a basket of currencies rather than the US dollar.

However, it will take time for a two-way exchange rate mechanism for the renminbi to be established, he said.

[Chinese version中文版]

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