China Press Digest Sep 22: Yuan, Consumption, Housing

The following lists highlights from Chinese press reports on Wednesday:

• The PBOC will steadily promote yuan internationalization, further expand the cross-border use of yuan under current accounts in businesses such as commodity and e-commerce trade, according to the 2021 RMB Internationalization Report published on the PBOC website. The central bank said it will further broaden cross-border investment and financing channels for the yuan, enrich risk hedging tools, while strengthening the monitoring and early warning of cross-border capital flows. As of end-June, foreign investors hold a total CNY10.26 trillion of financial assets including yuan stocks, bonds, loans and deposits, rising 42.8% y/y. Yuan ranks the fifth among major international payment currencies in June, also the fifth in the official foreign exchange reserve currency composition (COFER) tracked by the International Monetary Fund (IMF).
• China's consumption may rebound from the low level in August as policies to boost consumer demand kick in, the Securities Times said. During the Mid-Autumn Festival, travelers made about 88 million trips inside China, generating CNY37 billion in total tourist revenue, or 87.2% and 78.6% of the pre-pandemic levels in 2019, the newspaper said citing data by the Ministry of Culture and Tourism. The government has released measures to promote spending on new and second-hand vehicles, home appliances, furniture and catering following the sluggish August retail sales data, which would help to unleash more demand in the upcoming consumption peak season in September and October, the newspaper said citing analysts. China's retail sales managed to gain only 2.5% y/y in August, the slowest in a year, down from July's 8.5%.
• China should optimize controls over the real estate market and not hurt those in real demand for housing, the Economic Daily said in a commentary. There are still new residents and young people in large cities with strong desires to purchase homes though without sufficient money, the newspaper said. Their needs should be assured and met to help enlarge the market and ensure its healthy growth, said the newspaper. Those who speculate on houses have the capital and resources to evade policies while the less resourceful but with real needs often fall victims, so the government should further refine policies, said the newspaper.