China’s yuan breached 6.83 to the US dollar this week for the first time since May 2019 and will continue to appreciate as China maintains a neutral monetary policy while other major economies loosen aggressively. China's shift to expanding domestic demand, promoted by President Xi Jinping under the rubric of “dual circulation,” favors a strong currency. A bearish flattening of China’s yield curve between 3-year and 10-year maturities shows that the market expects the People’s Bank of China (PBC) to keep short-term rates high for some time. China is now the only big fixed-income market in the world that offers positive real interest rates; it is the only major economy that will grow during 2020, and; it is the only one to recover without drastic monetary easing.