And yet, despite its reluctant promises, China finds itself in a dilemma: any further monetary easing will devalue the Yuan below 7.00 against the dollar, a critical level to both the PBOC, and to the Trump trade hawks, who will see breach of this key level as confirmation of currency war and react appropriately. Meanwhile, further fiscal stimulus would mean even more debt in a nation which already has over 300% debt/GDP, will record a record number of corporate bond defaults in 2018, and has been grappling with periodic on again, off again deleveraging campaigns which have so fair in reducing China’s debt load.
https://www.zerohedge.com/news/2018-10-31/china-vows-more-stimulus-economy-verge-contraction
