Fed rate cuts will be welcomed by Chinese policymakers as they make it easier for property developers to service their dollar debt and reduce the need for PBOC intervention to defend the renminbi. But the benefits will be modest, not least because the PBOC is unlikely to take advantage of the renminbi’s reversal to ease policy significantly. Meanwhile, consumers continued to hold back during the recent Mid-Autumn Festival holiday, with domestic tourism spending lower in real terms than it was five years ago.
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