China Press Digest Oct 12: Liquidity, Coal, Energy Security

The following lists highlights from Chinese press reports on Tuesday:

• The PBOC may cut banks' reserve requirement ratios as early as in October to fill the liquidity gap caused by accelerated issuance of local government bonds, the 21st Century Business Herald reported citing analysts. The liquidity shortage is estimated to be around CNY1.4 trillion, as the net financing of government bonds in October will be around CNY860 billion, and October is the tax payment peak with CNY500 billion MLFs maturing, the newspaper said citing Yang Yewei, the chief analyst at Guosheng Securities. October is a suitable time window for an RRR cut to smoothen liquidity, or it could affect the cross-cycle adjustment and the policy convergence going into the next year, the newspaper said citing analysts from Huachuang Securities.
• China must study the timeline and roadmap for the stages of achieving peak carbon goal to incorporate the situations of power and coal supply shortages, Premier Li Keqiang told a cabinet meeting, according to Xinhua News Agency. Local authorities should be realistic and rectify the cookie-cutter way of limiting electricity usage, production or competitive carbon reduction, so as to ensure people's heating needs, stable logistical supply and steady economic growth, Li said according to Xinhua. China must develop more natural, shale and coal gases, and boost coal gas reserves, while steadily retire inefficient coal, Li said.
• China needs to continue ensuring its energy supply security by optimizing domestic supplies, diversifying overseas sources and protecting the safety of energy transport routes, the Global Times said in a commentary. Only by reducing the dependence on fossil fuels can China break away from the constraints by the U.S. or other external forces when it comes to energy supplies, said the newspaper. China needs to re-examine its green energy development path to address potential risk factors, and it is an inevitable trend for domestic industries to reduce the use of fossil fuels and increase the use of renewable energy products, said the newspaper.