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MNI China Press Digest Aug 8: Yuan, Growth, Country Garden

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MNI (Beijing)

Highlights from Chinese press reports on Tuesday:

  • The yuan will take time to strengthen as markets wait for new stimulus policies to take effect and external factors remain uncertain, according to Huang Wentao, chief economist at China Securities Construction. In an interview with 21st Century Herald, Huang said although the government will not implement strong stimulus in H2, the yuan will strengthen later in the year as the domestic economy stabilises with inventories, incomes and exports recovering naturally. In the short term, CNY will fluctuate around CNY7.1-7.2 against the U.S. dollar, he added.
  • China can increase its total factor productivity (TFP) growth rate to 2.5% and above to better meet its 2035 target to double its GDP from 2020, according to Professor Liu Qiao, dean at Guanghua School of Management, Peking University. Liu said policymakers can increase productivity via industrial transformation and new infrastructure which focuses on 5G/6G, big data and artificial intelligence among others. Further TFP gains will come from strengthening weak areas of manufacturing supply chains and building new major industries such as aerospace and transportation power. (Source: Yicai)
  • Country Garden, once China’s biggest developer by sales, has denied claims that a working group led by the vice mayor of Foshan City have been stationed at the company after its share prices slumped by 7.69% on Monday with several domestic bonds leading the decline. Rumors that the developer may default on its debts have circulated for some time, as multiple debts due in the short term have pressured the company’s cash flow. The firm has the ability to cover short-term debt maturity barring accidents, as it has CNY147.55 billion cash on its balance sheet, of which CNY128.28 billion is unrestricted cash as of end-2022, while the corresponding short-term debt due within one year is about CNY93.71 billion. (Source: Yicai)
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