MNI China Press Digest Dec 1: GDP, MLF, Yuan Stability

The following lists highlights from Chinese press reports on Tuesday:

China's Q4 GDP growth may accelerate to 6.6% from 4.9% in Q3 as the November PMI recorded 52.1, up 0.7 points from October and within the expansion zone for the ninth month, the Shanghai Securities News reported citing Li Chao, an economist from Zheshang Securities. Both manufacturing and non-manufacturing PMIs should continue to expand in December as consumption and service industries continue to recover, according to Tang Jianwei, a researcher from the Bank of Communications.

The PBOC has signaled that it may keep the previously fixed-date MLF injections more flexible in the future following the CNY200 billion operation on Monday, the Economic Information Daily said citing Ming Ming, the chief fixed-income analyst with Citic Securities. The injection on Monday sought to maintain month-end liquidity and prepare for the CNY300 billion MLF rolling over on Dec 7, at a time when banks must pay required deposits to the PBOC. The PBOC normally issues MFL on the 15th day of the month. The MLF and increased fiscal spending in the coming month should help ease long-term debt pressure on banks in addition to a series of SOE bond defaults and competition to win deposits, Ming said.

China will prioritize the stability of its currency and pursue market-based interest rate reforms to improve policy transmission and ensure capital reaches the real economy, the Securities Daily reported citing an article by Governor Yi Gang of the PBOC. China needs to establish an independent central bank financial budget management system to maintain a firewall between finance and the central bank to avoid the monetization of the fiscal deficit, wrote Yi. It was important to prevent corporate credit risks being carried onto the central bank's books, which may affect the yuan's credit standing, Yi wrote. He said the PBOC will strengthen and integrate the macro-prudential management of major financial activities, markets, institutions and infrastructure.