China Press Digest Sep 28: Fiscal, Housing, Power Cut

The following lists highlights from Chinese press reports on Tuesday:

• China should increase the intensity of its proactive fiscal policy suport by stimulating effective investment demand especially boosting infrastructure investment growth, so to stabilize the economic growth in Q4 and next year, the China Securities Journal reported citing analysts. The monthly growth rate of real estate investment dropped to nearly zero in August, while exports may slow with the end of the U.S. large-scale fiscal stimulus and improved overseas pandemics, the newspaper said citing CICC Chief Analyst Chen Jianheng. The Chinese government should speed up fiscal spending, especially the issuance and use of local government special bonds to accelerate the construction of major projects, and next year's quota of such infrastructure-back special bonds should also be partly front-loaded, the newspaper said citing Wang Yiming, a member of the Monetary Policy Committee of the People's Bank of China.
• China may not further tighten its housing policies, with some local governments may even marginally relax restrictions given that the cooling housing market has placed developers in financial trouble and raised concerns about increasing risks, the Securities Times reported citing analysts. The government is expected to release some loosening on home sales around November, so to stabilize the operation of developers, as it should still guard against the possibility of further cooldown of the market in Q4, the newspaper said citing Yan Yuejin, research director at E-House Research Institute. Housing hotspots will continue with purchasing limits, while cities that saw falling home prices may welcome some policy boost, as some local governments including Guilin and Shenyang have recently moved to strictly control large home price cuts, the newspaper said citing analysts.
• Chinese authorities should avoid taking the extreme measure of forcibly cutting electricity supply to achieving unrealistic emission-reduction goals while sacrificing businesses' normal operations, which can hurt the hard earned economic recovery, the Economic Daily said in an editorial. The forced electricity outage in China's many regions including the Northeast highlighted the difficulty of choosing meeting its carbon-neutral goals and energy-powered economic growth, the newspaper said. The government should use consistent and predicable policies to curb excess consumption and pollution while striving to meet businesses' energy needs, it said.