MNI China Press Digest April 10: Growth, SOE Reform, Trade

Highlights from Chinese press reports on Monday:

• The Yicai Chief Economists Confidence Index read 51.65 in March, the third consecutive month above the 50-point expansionary mark. Economists on a recent panel forecasted 5.47% 2023 GDP growth, with 3.99% for Q1. The expected average CNY/USD exchange rate for 2023 strengthened from CNY6.65 to CNY6.69. The recent banking risks in developed economies resulted from overly loose monetary policy following Covid-19 and China should establish a financial governance system with Chinese characteristics, according to all participants. One expert said high-frequency indicators showed the recovery accelerated in March, but the job market remains weak and over one-third of industrial enterprises are not profitable. (Source: Yicai)
• Experts expect more state-owned enterprise spin-offs and split-listings this year to release value, according to the Securities Daily. The experts said spin-offs are a good way to highlight the value of each business unit and strengthen financing channels as they are relatively diversified. Spin-offs from SOEs involved with semiconductor manufacturing, new energy and new materials, intelligent manufacturing, electrical equipment, and other emerging technologies are likely. Spin-offs will positively reshape the valuation of SOEs, strengthen state-owned capital, and preserve value of state-owned assets, the Securities Daily said.
• China's industries need more support to increase trade with regional markets such as ASEAN, according to a recent executive meeting at the State Council. Yicai said China's foreign trade situation has deteriorated, with import and export data slightly decreasing by 0.8% y/y in the first two months. Exports, however, improved after February, with heavy truck traffic reported around major ports. Exports must stabilise to maintain China’s position as the world’s factory and help developed economies combat inflation and stagflation, according to Yicai. China should urgently construct an institutional system to promote trade and investment, rather than volatile ad-hoc policies, Yicai said.