The offshore and onshore RMB devaluated 3.2% and 2.7%, respectively, to its recent low since the uplift of tariffs by the US and both dropped to RMB 6.9/USD on May 13th and 17th. Chinese officials verbally support the currency to the public due to the recent fluctuation of the currency. The yield spread between U.S. and Chinese 10-year sovereign bonds was “still in a relatively comfortable range” and the case for the US Fed to raise interest rates was smaller, People’s Bank of China’s Governor Yi Gang said. On the other hand, CBIRC Chairman Guo Shuqing reiterated that China has no plan to engineer a currency depreciation to support its exports. Therefore, the PRC government has expressed the worry over the depreciation. The Yuan could test the 5-month low at RMB 6.977/USD appeared on October of last year if the outcome of the G20 summit is negative. It could break the RMB 7/USD once the trade talks failed. Furthermore, the PBoC is likely to lower its interest rate to boost the economy based on the recent weak economic data. The rate cut could further place pressure on the currency. We therefore recommend avoiding the sectors highly correlated to the RMB exchange rate fluctuation amid the increasing RMB depreciation risk. The sectors include Chinese aviation and developers holding large amount of USD debt.