US-China trade tensions have so far had a limited impact on bilateral direct investment. Chinese investment in the US stagnated last year but it had stalled even before Trump started to get tough on China. And FDI flows in the other direction remain surprisingly strong. But with hopes for a trade deal giving way to expectations of a drawn-out conflict, the trade war may soon weigh more heavily. Meanwhile, PBOC governor Yi Gang has been talking up interest rate reform and talking down the prospect of benchmark rate cuts. But we think the former will fail to deliver the hoped-for gains while the latter still leaves room for the PBOC to lower the (arguably more important) rate at which it lends to banks in the interbank market.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services