Just as the Chinese Communist Party run hawkish tabloid Global Times warned that “major retaliative measures’ on US for Huawei are underway, the Commerce Ministry announced to set up a list of “unreliable entities” targets companies that violate market rules, cut off supply to the country.

The ministry noted that for non-commercial purposes, some foreign entities impose blockades, confessions and other discriminatory measures against Chinese enterprises and damage their legitimate rights and interests”. Such entities endanger China’s national security and interests, and also pose a threat to global supply chain. Detailed measures regarding the list will be announced later.

Off shore Chinese Yuan is back under pressure today, with USD/CNH hitting as high as 6.9472 so far. 6.9488 resistance is back in focus. Overall, we’re not expecting a sustainable top in USD/CNH at current level, not even at the psychologically important 7 handle.

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There were talks that USD/CNH above 7 would cause serious capital outflow and risks delaying internationalization of the Yuan. But it’s also noted that the government has implement measures already, including tighter compliance requirements. For, we’d believe that all the official would try is only slowing Yuan’s decline, rather than blocking it.

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