BACKED by robust capital inflows and trade outlook, China's currency will remain stable this year, with the possibility of a mild and steady rise against the US dollar, Hang Seng Bank says.
In a report yesterday, the bank forecast that stability of the yuan would continue to depend on trade and investment flows.
On both counts, the picture was promising.
Despite the Sino-US dispute over China's lack of intellectual property protection, mainland exports this year were expected to grow faster than imports because of the recovery in Japan and western Europe and a tight control on imports.
'The trade balance would therefore stay in good shape,' the bank said.
Last year, China posted a surplus of US$5.3 billion, against a deficit of $12.2 billion in 1993.
China's exports would expand less rapidly than last year because of the yuan's appreciation of about three per cent over the past year.
