Prior to the G20 summit, China once again tightened reserve requirements for some institutions by 50 basis points, which will come into force on 15 November. This reflects the tightening of monetary policy, but a bit not in the way in which we are accustomed to see it as the banking sector is much more controlled from the center than in most other economies. Moreover, the yuan rose at night to the strongest level (6.6363) from the beginning of a more flexible navigation in the middle of the year. In nominal terms, the Yuan is now stronger on 2,9% against the dollar. As everyone knows, many in the West - particularly in the U.S. - this pace seems to be insufficient.Data on trade in China. Surplus in October amounted to 27.2 billion dollars, more than 16.9 billion in September, and slightly stronger market expectations. Export growth rate was 22.9%, again slower in comparison with the previous month. But all this is a question of statistics, since the annual rate of growth is weakening after drops in 2008-2009 The average export growth rate was 17% in the last five years so that exports are still strong enough from a historical perspective.
Cheap speech before the summit G20. President Hu said that he wants more coordination between the representatives of twenty. The irony is that China has great experience in coordinating domestic policy, but sharply resisted international coordination, it does not matter whether they relate to deficit / surplus of current account transactions or the exchange rate regime. Expectations from this summit is very low. There is general agreement that the system is broken, but when discussing how to fix it, all turn to their own interests and situations, putting them forward.
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