China: More detail on reforms - BBH

Analysts at BBH point out that the forum continues in China, and the new PBOC Governor wasted no time following President Xi's speech yesterday to flesh out more details of the reforms.  

Key Quotes

“These include quadrupling the Shanghai-Hong Kong stock connect as of May 1.  Limits on foreign insurers and ownership of securities firms will be reduced.  Yi Gang pushed against "big bang" ideas, noting that it is not China's way, which is cautious and gradual.”

“Even if Xi offered old wine in new skin yesterday, the specifics today reinforce our sense that China is pursuing a three-prong strategy in dealing with the US trade stance.  First, it flexes some of its considerable economic heft.  Second, it challenges the unilateral US actions at the WTO, perhaps in concert with others.  Third, it will enact several economic and financial reforms that are in China's own immediate interest.”

“The yuan both onshore and offshore was little changed.  Chinese shares edged higher (0.5%).  The MSCI Asia Pacific Index was fractionally lower, as is the MSCI Emerging Markets Index.  China reported softer than expected inflation.  March PPI rose 3.1% y/y, down from 3.7% in February.  Consumer price inflation slowed to 2.1% from 2.9%.  This is the fifth month; producer price inflation has slowed.  The slowing of consumer price inflation seems to be largely unwinding the Lunar New Year-related jump.  The quarterly average has edged higher for the third consecutive quarter, but the pace in Q1 was exaggerated.”