China has tightened its monetary policy very modestly to curtail the growth of corporate leverage and more effectively price risk in money markets. Growth is unlikely to be impacted; it is sliding from 6.8% last year to 6.5% as stimulus abates. Similarly, the renminbi will continue to depreciate above 7.00 to the US dollar. For fixed income markets, long-dated onshore bond yields will rise and require investors to be selective in their exposure. Offshore issuance should increase as international rates are lower. In equities, higher yields and spreads make insurance and banks the beneficiaries. Infrastructure, property and consumer finance appear to be the sectors most at risk of a setback.