Key takeawayGoldman Sachs judges that Chinese policymakers favor gradual renminbi appreciation at a pace of 3%–5% per year. U.S. data-center restrictions could disrupt exports in the short term, but are not enough to change its constructive view on Chinese exports. Some funds for growth stabilization may also be used ahead of schedule across the year-end.
Why has renminbi appreciation suddenly slowed?
- On 3 November, the People’s Bank of China raised the foreign-currency reserve requirement ratio from 2% to 4%, tightening foreign-exchange liquidity. In the preceding month, the annualized pace of renminbi appreciation against the U.S. dollar was about 10%; on 2 November, the dollar-yuan rate fell below 6.65, then rebounded to 6.67 on the day the announcement was made.
- Goldman Sachs interprets this as a sign that policymakers do not want the renminbi to appreciate too quickly. Their preference is not to reverse the direction of appreciation, but to keep the pace at around 3%–5% against the U.S. dollar per year.
Will U.S. data-center restrictions weigh on Chinese exports?
- Goldman Sachs distinguishes between the effects at the federal and local levels: even if Democrats win both the House and the Senate, the federal outlook for data-center and AI regulation is unlikely to change; Democratic victories at the state and local levels could bring temporary data-center pauses, involving about 45% of planned U.S. capacity expansions.
- A slowdown in data-center construction could reduce overseas AI demand and put some pressure on Chinese exports next year. Goldman Sachs remains positive on Chinese exports, reasoning that the pauses may be temporary and that AI-related products are not a major driver of actual growth in China’s exports.
What cross-year policy signals did the State Council meeting send?
- At its meeting on 6 November, the State Council called for “improving the market-stabilization mechanism” and “enhancing the intrinsic stability of the capital market.” Goldman Sachs infers from this that recent stock-market volatility has drawn the attention of senior leaders.
- The meeting proposed studying next year’s economic work and strengthening policy coordination across years. Goldman Sachs infers that some of the available funds may be spent early next year to stabilize growth; this is consistent with its view that the 2026 growth target is within reach.
