MNI China Press Digest August 4: PBOC, Rate Cuts, Stock Market

Highlights from Chinese press reports on Friday:

• The People's Bank of China will strengthen coordination between financial, fiscal and industrial policies, and will guide more financial resources into the private economy, said PBOC Governor Pan Gongsheng at a symposium with heads of private enterprises and financial institutions on Thursday. Pan said the scale of instruments to support private enterprises in debt financing will be expanded. Pan also pledged to precisely implement differentiated housing credit policies and meet the reasonable financing needs of private developers. (Source: PBOC website)
• China will likely cut interest rates and increase sales of central government bonds in H2 to boost the economy, but it must remain vigilant against breaching risk regulatory principles and the legal framework, said Xiaojing Zhang, dean at the Institute of Economics of the Chinese Academy of Social Sciences. There is a great chance for rate cuts, including adjustments to rates of outstanding loans, said Zhang. Central government bond issuance can help repair the balance sheets of enterprises, residents and local governments, but such debt expansion and the arrangement of uses need to go through legal procedures, said Zhang. (Source: 21st Century Business Herald)
• China Securities Depository and Clearing (CSDC) plans to reduce the minimum settlement reserve fund payment ratio for stock-related businesses further to an average of about 13% from the 16% noted since October 2023. This could release over CNY30 billion funds to the market. It will encourage faster completion of fund settlements, further improve the efficiency of fund use by securities companies and fund managers, reduce market costs, and boost confidence. (Source: Quanshang China)