MNI China Press Digest Aug 20: RRR Cut, Evergrande, Australia

The following lists highlights from Chinese press reports on Friday:

• China's central bank is expected to further cut banks' reserve requirement ratios in line with the "cross-cycle adjustment" policies that lean toward loosening and also to ensure the market's rising liquidity needs are met, the China Securities Journal reported citing the consensus of several analysts. There is a CNY2.45 trillion total of MLFs maturing in Q4 that may need to be renewed, the newspaper said citing analyst Zhou Yue of Zhongti Securities. Cutting RRRs is also in line with the government's push to promote low-carbon and emission-reduction initiatives, as the PBOC also signalled it would provide low-cost capital to qualified financial institutions, the newspaper said. However, the market doesn't expect this month's LPR, to be announced today, to change nor that the PBOC would lower interest rates as the economy hasn't significantly slowed, the newspaper said.
• China Evergrande Group, the country's most indebted developer, said it will ensure its property project construction and delivery, resolve debt risks and maintain the market and financial stability, the 21st Century Business Herald reported citing the company after its executives were summoned by banking regulators in an unprecedented meeting. The developer has been selling its assets including in electric vehicles and the Internet, while two buyers are taking interest in its subsidiary Shengjing Bank, the newspaper said. Concern over the developer's financial health intensified in June when it failed to pay some commercial paper on time.
• The China-Australia trade bubble may burst with iron ore prices returning to a more regular range and as China curbs its steel production to reduce carbon emissions, the Global Times said in an editorial. Demand for iron ore has also slowed with unprecedented rains across the country and the pandemic disrupted some production, the newspaper said. The iron ore trade may shift to a buyer's market as China, the world's largest iron ore consumer, pushes ahead with carbon neutrality targets, the newspaper said. China's total imports from Australia rose 37.4% y/y in the first seven months even as China tried to limit imports due to deteriorating bilateral relations.