Goldman Sachs outlook for China next year - mor reforms, stable mon pol

(In brief) from Goldman Sachs

Expect China to continue reform efforts to reduce the risks built up during growth phases

• China to maintain "broadly stable monetary policy"
• Economic reforms should accelerate
• Targeted tightening to ease financial risk and address concerns on the environment, Likely to continue efforts to curb leverage in shadow banking, restraints home-price appreciation in first- and second-tier cities
• Watch for some small loosening of capital controls - this is quasi-fiscal support

On inflation and yuan:

• Still strong economic growth along with -higher food prices should boost CPI (up toward top end of government target range)
• GS sees minor yuan depreciation on a trade-weighted basis ... "implemented opportunistically during any bouts of dollar weakness and with only modest effects on capital flows given tighter controls."