On the one hand, China’s economy has been stable and improving; it has maintained a normal monetary policy; its balance of payments is sound and stable; and its foreign exchange market is maturing. All these factors will continue to provide strong support for the stability of the RMB exchange rate.
Most governments in Australia are trying to strengthen their own balance sheets by containing the build-up in debt that has been occurring.3 Public final spending is scheduled, according to the stated intentions of federal and state governments, to be subdued over the next couple of years. In fact, it is forecast to record the most subdued growth for a long time.