MNI China Press Digest April 03: GDP, Employment, Profits

Highlights from Chinese press reports on Monday:

• GDP growth in China can exceed 7.0% y/y, as the low-base effect from last year and recovering aggregate demand leads to accelerated growth, according to several chief economists interviewed by the Securities Daily. However, the m/m growth trend should be of concern, as this could slow in Q2. The economists called for proactive fiscal policy to implement subsidies and concessions, and for monetary policy to reduce the cost of personal consumer credit, encouraging demand. One expert expects further cuts to the reserve requirement ratio later this year, but the possibility of a loan prime rate decrease was declining.
• Universities are strengthening collaboration with companies to boost levels of graduate employment, with several large recruitment fares taking place over the spring period, according to the 21st Century Herald. Demand for graduates with skills in sales are in high demand this year and private firms are playing an important role alongside state-owned enterprises in stabilising employment. In order to adapt to changing economic and social developments, the education system also has increased training and attendance in science, engineering, agriculture and medicine, the paper said.
• The sharp 22.9% y/y contraction in industrial profits during the first two months of the year shows policy support is needed to secure the economic recovery, according to Yicai. More targeted policies, as well as reserve requirement ratio cuts, are needed to reduce financing costs for private enterprises and help the real economy. Strong bank financial results reported recently, plus the high reported salary of bank employees, means financial firms can provide more favorable conditions to SMEs in order to boost the economy, Yicai noted.