SHANGHAI (Reuters) – The will benefit from a de-escalation of Sino-U.S. trade tensions but is vulnerable to possible volatility in cross-border capital flows, a former Chinese foreign currency regulator told the China Business News.
The interim deal reached by Washington and Beijing means trade frictions have ameliorated, reducing uncertainty and boosting market confidence in the yuan, the newspaper said, citing Guan Tao, a former official at the State Administration of Foreign Exchange.
Guan warned, however, that a slow recovery in global growth and lofty asset prices could cause global market fluctuations, which in turn could bring wild swings in cross-border capital flows that impact expectations regarding the yuan.
But China should learn lessons from Japan’s experience and refrain from using strong stimulus, which could result in asset price bubbles and long-term economic stagnation, Guan was quoted as saying.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.