MNI China Press Digest Aug 30: Liquidity, LGBs, Wider Opening

The following lists highlights from Chinese press reports on Monday:

• China is likely to stick to reform and revitalize the market rather than relying on more liquidity such as cutting interest rates, as the unbalanced recovery from impact of the pandemic has worsened the fundamental issues that the economy faces, Guan Tao, a former forex regulatory official and global chief economic of BOC Securities wrote in an article published on Yicai.com. Liquidity itself cannot force business expansion, more local government investments, or logistical breakdowns, Guan said. China should be on guard for risks of the yuan's sudden correction as other economies pursue easing, as well as surging commodity prices that fan inflation, Guan said.
• China will accelerate the issuance of local government special bonds moderately to ensure substantial work at the end of this year and early next year, the 21st Century Business Herald reported citing a report by the Ministry of Finance. Such bond sales may be about CNY500 billion for Sep, CNY700 billion for Dec, and a total of CNY600 billion in Oct and Nov, the newspaper said. Infrastructure investment may be boosted in the following months, though any growth could still be limited by the need of controlling local implicit debt, the newspaper said citing Wu Qiying, an analyst with GF Securities.
• China must persist in opening to the outside world despite rising global uncertainties, the official People's Daily said in a commentary. China should steadily expand the institutional opening of its rules and standards, deepen overseas partnerships via Belt and Road initiative, consolidate its supply chains, industrial chains as well as data and talent chains, the newspaper said. The growth of foreign trade reached 24.5% from January to July, registering a 10-year high, which has effectively ensured the balance of international payments and helped stabilized the economy, the newspaper said, though noting that the growth of orders may slow down as the pandemic gradually eases.