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A wider deficit, plus more monetary easing should help China achieve an around 8.6% GDP growth rate for this year.

With a seemingly robust economy, the incoming new leadership group in October will need to do some heavy lifting to address China's structural imbalances.

China’s services sectors delivered a positive set of results, but we need to see further improvement before a firm soft landing can be confirmed for the Chinese economy.

Beijing will achieve a soft-landing with an around 8.6% growth rate this year, in our view. We expect further easing and more concrete measures to support employment, small companies and private investment.

We expect March PMI to decline, as overall new orders rose only slightly relative to the substantial increase in inventories.

Today’s PMI data, together with a stronger-than-expected US data, will boost global risk-on sentiment, and favour emerging market currencies and commodities.

HSBC final PMI was was almost unchanged at 49.6

The affirmed Long-term foreign- and local-currency ratings are 'A' and Short-term foreign- and local-currency ratings are 'F1'.

Investment grade corporate bond yields in Europe and the United States have fallen sharply since late 2011.

February’s flash reading for HSBC’s China manufacturing PMI rose to a four-month high of 49.7, compared to 48.8 in January.

Under a sizable capital inflow scenario, and given that the PBoC has set 2012’s M2 target growth at 14%, we maintain our view that another two RRR cuts will be needed this year.

The probability of an RRR cut in Feb has dropped below 50%

If China is to maintain M2 growth at 14% in 2012 and if capital inflows remain sizable, two to three RRR cuts will be needed

China's investment-to-GDP ratio is indeed very high (46%), but it is still lower than the country's domestic savings-to-GDP ratio

January’s trade contraction reflected distortions from Chinese New Year. But with China’s growth still facing headwinds, more easing is still called for.

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