MNI China Press Digest Aug 29: Yuan, Duty Free, Revenue

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

• Analysts expect the yuan to strengthen further against the U.S. dollar within the year, supported by exporters’ foreign exchange settlement, with the intensity dependent on an economic improvement, Yicai.com reported. Exporters hold about USD500 billion in deposits of which USD100-200 billion will be settled if the offshore yuan rises above 7.1, the newspaper said, citing estimates from Zhang Meng, forex and interest rate strategist at Barclays. Exporters have accumulated dollars over the past two years given yuan pessimism and are likely to continue holding unless the Federal Reserve starts a substantial rate-cut cycle, the newspaper said, citing analysts.
• Authorities will open eight new downtown duty-free shops in cities including Guangzhou, Shenzhen, Chengdu and Tianjin, to boost domestic consumption in the second half, People’s Daily has reported. Additionally, they will transform the country’s existing thirteen existing duty-free shops into downtown outlets. Outbound travellers, including Chinese nationals departing from the Chinese mainland by air or cruise within 60 days can access the stores, the daily noted.
• Local governments are seeking new revenue streams by leveraging assets, Caixin.com reported. A Chongqing city fiscal report showed non-tax revenue mainly came from asset disposal, which grew 31.2% y/y in H1, while tax revenue grew by 2.8%. The city faces increasing difficulty in monetising assets and will focus on government-owned housing, land and large equipment, Caixin reported.