China: risks to the economy piling up

With the RRR cut, a partial rollover of the MLF and weaker economic data, we believe that the risks to economic growth are mounting. We discuss these risks and the possible policy actions that may follow The recently announced RRR cut of 0.5 percentage points will be effective today. The medium-term lending facility (MLF) was also rolled over by CNY100bn, though less than the matured size of CNY400bn. That said, it is difficult to get the “real” roll-over size because a year ago, there was a targeted MLF that had a maturity of 3 years, and the PBoC did not…