In recent quarters, market participants appear more confident that China has the will and capacity to maintain its exchange rate regime, while achieving its growth targets, although there is a tension with high credit growth that will eventually need to be addressed.
Early last year, China’s gross domestic product (GDP) growth, which had averaged nearly 8 percent over the previous five years, was only a little above an annual rate of 5 percent in the first quarter, according to official data, and many observers believe that actual growth was weaker.