人民币展望-DeutscheBank-RMBview：Westillexpectdepreciationbutatamoregradualpace

pAsiaChinaEconomicsUpdateDate1 August 2017Deutsche BankResearchRMB view: We still expect depreciationbut at a more gradual paceWe revise our USDCNY forecast to 6.9 by end of this year, 7.1 in 2018, and 7.4in 2019. Before revision it was 7.1, 7.6 and 7.9 respectively. The revision for thisyear is due to the surprisingly weak US dollar against the other currencies, andthe upside risk in China’s growth outlook in H2 (please see our report on 17 July2017). The revision for 2018 and 2019 is mostly driven by our forecast revision forEURUSD, as our FX strategists have a more positive view on Euro than before.We still expect a moderate but persistent depreciation against the PBoC basket,by 2.2%, 2.7% and 4.9% in 2017-19. The key driver of this depreciationarypressure is the property bubble in China. The economy is increasingly dependenton the booming property and land markets (see our report China’s indispensableproperty bubble issued on 17 March 2017). To sustain high property pricesthe government will likely keep monetary policy stance loose in the next fewyears. The large wealth effect from the property bubble will continue to push updomestic demand for imports. We therefore expect the current account surplusto drop to 1.3% of GDP in 2017 and 1.1% in 2018 (1.8% in 2016), with risks onthe down side.This boom of domestic demand is evident from the balance of payments. On thetrade side, imports (excluding commodities and processing imports) grew at 0.6%in 2016 and 19.5% so far this year compared to -7.7% and 8.5% of export growth(Fig 1). In this exercise we exclude commodity imports to avoid the distortionfrom volatile commodity prices. We also exclude processing imports as they areparts for export purpose, hence not for domestic consumption. Other than trade,Chinese oversea spending has been rising sharply as well. This caused the currentaccount surplus to shrink (Fig 2). We expect this trend to continue in the nextfew years.Zhiwei Zhang, PhDChief Economist+852-2203 8308Deutsche Bank AG/Hong KongDISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 083/04/2017.Distributed on: 01/08/2017 09:42:08 GMT0bed7b6cf11c1 August 2017UpdateFigure 1: Growth of exports and imports-30-20-1001020304050607020072008200920102011201220132014201520162017ExportsImports, excl. commodities and processing trade imports3mmayoy%Source: Deutsche Bank, WINDFigure 2: Current account balance, % of GDP1.40.00.51.01.52.02.53.03.54.02011-032011-062011-092011-122012-032012-062012-092012-122013-032013-062013-092013-122014-032014-062014-092014-122015-032015-062015-092015-122016-032016-062016-092016-122017-03Current account balance % of GDP, 4Q rolling sumSource: Deutsche Bank, WINDPage 2Deutsche Bank AG/Hong Kong1 August 2017UpdateAppendix 1Important Disclosures*Other information available upon request*Prices are current as of the end of the previous trading session unless otherwise indicated and are sourced fromlocal exchanges via Reuters, Bloomberg, and other vendors.