MNI China Press Digest Sep 6: RRR Cut, Commodity Futures

The following lists highlights from Chinese press reports on Monday:

• The PBOC is likely to increase liquidity by cutting the reserve requirement ratios or even interest rates this year should the market need it, the China Securities Journal reported citing Zeng Gang, deputy director of the National Institution for Finance & Development. The probability of RRR cuts is higher, as it will improve liquidity more directly and drive banks to increase capital investment and lower credit costs, the newspaper cited Zeng as saying. The PBOC will provide medium and long-term, low-cost funds for specific entities and areas such as technology innovation, SMEs, rural revitalization and carbon emission through monetary tools such as special-purpose re-lending and rediscounting, Zeng was cited as saying.
• China may introduce bulk marine shipping futures sooner than expected, as the country seeks to accelerate opening more futures products to foreign traders, and cater to the growing hedging needs amid increasing shipping prices, the 21st Century Business Herald reported after a State Council circular that called for more futures trading through the Free Trade Zones. More FTZs may learn from the Shanghai FTZ in creating an international commodity futures market denominated and settled in yuan, so to increase the pricing power of iron ore, soybeans, and PTA globally, the newspaper cited an industry insider. By opening up to overseas traders, the speculation in the domestic market could be eased, the newspaper said.