Our China Vulnerability Sentiment Index (CVSI) notched its fourth straight month of improvement in October, reflecting favourable policy mix, marked by accommodative fiscal policy to stabilise growth and prudent monetary and regulatory measures to curb financial fragility risks related to shadow banking, SOEs and housing sector. China’s reassuring focus on quality growth and commitment to structural reforms at the 19th Party Congress bodes well for CVSI going forward. Digging deeper, while SOE, Housing and Shadow banking indices improved, exchange rate vulnerability index worsened. Last month saw Yuan under pressure in wake of the 19th Party Congress even as PBOC focused on maintaining exchange rate stability and adequate interbank liquidity.