China’s currency keeps weakening, which is a sign that something is not right with their economy. Slowdown in exports, problems in the real estate sector, with several developers on the edge of bankruptcy (in addition to Evergrande) have pushed the #yuan to its lower band, and to its weakest levels of the last 5 years. PBoC has responded with rate cuts, which in turn, make the currency less attractive, and investors are still expecting a fiscal stimuli package that Xi is resisting to launch. It’s not only an economic problem: official youth unemployment has reached 21%, but unofficial figures could be closer to 50%, which could spark social tensions. And it’s not only a domestic problem, since south east Asia is closely tied to the economic well being of China.
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