MNI China Press Digest Aug 19: Deposits, FDI, Liberalisation

MNI (BEIJING (MNI) - Highlights from Chinese press reports on Friday:

• China’s deposits fell in July as banks lowered their deposit interest rates, which pushed funds into wealth management and treasury bonds, according to Zhou Maohua, macro researcher at Everbright Bank. Data showed RMB deposits increased by CNY10.7 trillion in the first seven months, down from CNY11.5 trillion during H1, while CITIC Securities noted July saw wealth management funds increase by about CNY1.78 trillion. Zhou said deposit rates could fall further in H2 but will not lead to a widescale re-allocation of deposits given that the return gap between bank deposits and wealth management products was not large.
• China saw utilised foreign investment reach CNY539.5 billion in July, down 29.6% y/y, according Ministry of Commerce data. The Foreign Investment Department stressed that quality of investment should also be considered alongside quantity, as well as the overall development of foreign-funded enterprises. In July, the ministry recorded 31,654 newly established foreign firms, up 11.4% y/y. Manufacturing industry FDI hit CNY154.5 billion, accounting for 28.6% of the total, up 2.9 percentage points y/y.
• Government policy to open market access and remove entry barriers aims to provide foreign-funded enterprises with a sense of gain, Li Xuzhen, deputy representative of international trade negotiations at the Ministry of Commerce for international trade has said. Speaking at a press conference, Li noted attracting and utilising foreign capital was important for Chinese modernisation. In future, China will relax market access, issue a new negative list for overseas investment access as soon as possible and remove all restrictions in the manufacturing sector, Li continued.