China: Testament of policy effectiveness hitherto

• With better-than-expected PMIs, CPIs, and credit data prints, growth rates of major indicators are expected to stabilize in August.
• Consumption will likely improve in the coming quarters on stimulus such as an increase in tax allowances.
• Authorities are watching for positive spillover effects from tier 1 cities to the rest of China.
• External headwinds also appear to be moderating.
• PBOC is likely to maintain an accommodative monetary policy stance.

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