(Yicai Global) June 8 -- After hitting a 49-month high last month, the Yicai Chief Economist Confidence Index fell to 50.35, meaning economists expect China's economy to keep expanding next month, but at a slower pace than in previous months.
China did well in the first quarter, but failed to sustain that trend into the second, with economic growth slowing as financial regulation and real estate control policies kicked in.
The mix of a sound and neutral monetary policy and active fiscal policy will continue. Under the influence of tighter financial regulation, 25 chief economists for major financial institutions surveyed predicted that China's new loans, social financing scale and broad money (M2) annual rises were expected to fall last month. Also, overall consumption is relatively stable, and the annual growth rate of the consumer price index (CPI) will rebound for three straight months, even as the annual growth rate of the purchase price index (PPI) continues its decline. Fixed asset investment is down slightly, while the trade surplus maintains its expansion. Imports and exports are falling on a yearly basis, but still preserve a positive posture.
On May 26, the China Foreign Exchange Trade System said it would introduce counter-cyclical factors to the yuan's future price mechanism for the US dollar, a move that shows the central bank's determination to stabilize the exchange rate. Economists expect the yuan to fall to 6.8684 against the dollar by the end of this month (on May 31, the median yuan price against the dollar was 6.8633), and economists have raised their expectations for the yuan against the US dollar at the end of the year, as it rose from 7.04 at the end of last month to 6.99.