China's Economy Will Continue To Stabilize And The RMB Exchange Rate Will Be Tested.

China's economy will continue to stabilise in the second half of this year, in the context of deepening domestic supply side reform, synchronizing internal pformation and upgrading with external demand growth, overall controllable financial deleveraging and monetary policy becoming stable and neutral.

Although the RMB exchange rate may face some so-called "severe test" in the future, but in the second half of the year, the overall stability or strong operation pattern will continue under the common support of economic fundamentals and monetary policy.

At the end of last year, some investors who had watched the RMB exchange rate once thought: "the RMB exchange rate against the US dollar will fall below the 7 pass in 2017."

In the first half of this year, the RMB exchange rate has gone through a strong trend of continuous shocks.

After more than 2% rise since the beginning of the year,

The exchange rate of the US dollar in the domestic and foreign markets has not only "failed" to fall below the threshold of 7, but has risen to 6.80.

In this process, the "pessimistic argument" that the Chinese economy will encounter a hard landing due to some major risk factors is completely lost.

Looking back at the overall operation of the global exchange market in the first half of 2017, it is easy to find that the exchange rate performance of the world's major currencies since the beginning of this year is contrary to the previous mainstream view of the so-called market.

The US dollar, once valued by investors, became the "biggest loser" in the first half of the world's major currencies.

Up to 18 hours in Beijing on June 28th, the US dollar index was 96.31 points, a drop of 5.94% in the year.

And in terms of the world's major non US currency exchange rates, despite the middle of last year,

The French general election, the European refugee crisis and other risk events have also made significant impact on the exchange rate of sterling, euro and other currencies. But in the context of the overall macroeconomic stability of the relevant economies, the exchange rates of all currencies related to the US dollar have increased significantly.

Even the yen, which is still sticking to quantitative easing and low interest rate monetary policy, has also seen a marked improvement since the beginning of this year.

Judging from the performance of the RMB exchange rate, despite the fact that since the second half of last year, there has been RMB shorts continuously looking at the prospect of China's economy and RMB exchange rate on the grounds of China's "macro leverage and debt level", "overheated real estate market", "excessive monetary dependence" and "excessive capital outflow".

In the first 5 months of this year, China's economic pformation has made progress in many aspects, including

From relying heavily on industry to service industry, demand continues to shift from reliance on investment and exports to consumption, and the proportion of services and consumption steadily rises.

The International Monetary Fund (IMF) has increased its economic growth forecast for China in 2017 and 2018 for the 3 time.

In the context of China's internal economic pformation and upgrading, the supply side reform and the reform of state-owned enterprises continue to stimulate the vitality of the micro economic entities and the influence of "one belt and one road" initiative, China's economy will continue to maintain high growth in the second half of this year and the next few years, and continue to lead the world's other major economies, which will be a big probability event.

In terms of cross-border capital flows, from the "four successive growth" of China's foreign exchange reserves as at the end of 5, there has been a substantial reversal of the moderate outflow of capital over a longer period of time.

In the light of the recent capital inflow into the A share market and the opening of the "bond link" between the mainland and Hongkong, it is foreseeable that in the second half of this year and for a long time to come, the stability of the RMB exchange rate will surely gain more active support in cross-border capital flows. "MSCI

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