MNI China Press Digest, Aug 27:Yuan, Investment, Lending

The following lists highlights from Chinese press reports on Thursday:

The yuan and yuan assets may come under pressure on growing signs that the dollar index is solidifying, the market is turning risk-averse and U.S. fundamentals are slowly improving as the EU recovery is slowed by the pandemic, Shanghai Securities News reported citing Ming Ming, the vice president of CITIC Securities. Many domestic market participants are exporters and do not foresee a further strengthening of the yuan, the newspaper said citing Li Liuyang, an analyst with China Merchant Bank. The yuan's recent surge was supported by China's strong recovery and higher interest rates, the newspaper said.

Urban renewal plans by China's regional governments in the next five years may create as much as CNY10 trillion in new demand, the Economic Information Daily reported. Citing experts commenting on the so-called 14th Five Year Plans (2021-2025) developed by local authorities, the Daily's report said urban renewal measures, including spatial planning, land resources reallocation and remodeling existing homes, would help drive the next round of investments and growth. China needs to revitalise existing urban areas to avoid taking farm land, the report said.

Chinese bank lending to private and small companies may accelerate by over 30% y/y in the second half of the year backed by Government support policies, the Securities Daily reported citing Wang Qing, the chief analyst at Golden Credit Rating. Mid and long-term loans to manufacturers will also continue to grow faster than overall lending due to policies supporting high-tech manufacturing, Wang said. By the end of July, loans to manufacturers increased by 25.4% y/y, the fastest since 2010, while the balance of SME loans rose by 27.5%, the most in five months, the newspaper said.