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MNI China Press Digest Dec 1: PBOC, PMI, Real Estate

MNI (Singapore)
MNI (Beijing)

MNI summarises the key stories from the Chinese press.

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The following lists highlights from Chinese press reports on Thursday:

  • The People’s Bank of China will moderately increase open market operations to meet increased liquidity demand by the end of the year, thereby maintaining reasonable and ample liquidity, China Securities Journal reported citing analysts. The expected CNY500 billion of funds to be released after the cut to banks reserve requirement ratio on December 5, combined with the use of structural monetary policy tools, can offset the impact of a maturing Medium-term Lending Facility in the middle of the month. Increased fiscal spending near year-end will also increase liquidity supply, the newspaper said citing analysts. The provision of additional fiscal spending will come near year-end, the newspaper added.
  • China's government needs to quickly implement policies to support growth following the fall in November’s PMI to 48 from 49.2 in October, according to 21st Century Business Herald. Experts told the newspaper that falling demand and weaker confidence was placing downward pressure on the economy. To boost growth the government needed to control the pandemic using high precision methods, increase infrastructure investment, stabilise the real estate sector, and guide banks to support weak parts of the economy. The paper cites Wu Chaoming, vice president of the Financial Information Research Institute, as saying the ongoing pandemic and real-estate slowdown will depress the December PMI.
  • China’s housing market could bottom out by the second quarter next year as potential homebuyers may enter the market as confidence is restored following recent support for the sector, Yicai.com reported citing a report by China Real Estate Information Corporation. Recent measures to restore developers’ financing ability will ease their default risks and offset the downbeat expectations of the industry. The market may rebound in Q2 if the policy intensity can be maintained or strengthened into next year, but there is still uncertainty how long the market would consolidate near the bottom after the low appears, the newspaper said citing EH Consulting. In November, property sales by floor area in the key 30 cities decreased by 14% m/m, hitting a new low in a single month over the past six months, and the year-on-year decline further increased to 30%.
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The following lists highlights from Chinese press reports on Thursday:

  • The People’s Bank of China will moderately increase open market operations to meet increased liquidity demand by the end of the year, thereby maintaining reasonable and ample liquidity, China Securities Journal reported citing analysts. The expected CNY500 billion of funds to be released after the cut to banks reserve requirement ratio on December 5, combined with the use of structural monetary policy tools, can offset the impact of a maturing Medium-term Lending Facility in the middle of the month. Increased fiscal spending near year-end will also increase liquidity supply, the newspaper said citing analysts. The provision of additional fiscal spending will come near year-end, the newspaper added.
  • China's government needs to quickly implement policies to support growth following the fall in November’s PMI to 48 from 49.2 in October, according to 21st Century Business Herald. Experts told the newspaper that falling demand and weaker confidence was placing downward pressure on the economy. To boost growth the government needed to control the pandemic using high precision methods, increase infrastructure investment, stabilise the real estate sector, and guide banks to support weak parts of the economy. The paper cites Wu Chaoming, vice president of the Financial Information Research Institute, as saying the ongoing pandemic and real-estate slowdown will depress the December PMI.
  • China’s housing market could bottom out by the second quarter next year as potential homebuyers may enter the market as confidence is restored following recent support for the sector, Yicai.com reported citing a report by China Real Estate Information Corporation. Recent measures to restore developers’ financing ability will ease their default risks and offset the downbeat expectations of the industry. The market may rebound in Q2 if the policy intensity can be maintained or strengthened into next year, but there is still uncertainty how long the market would consolidate near the bottom after the low appears, the newspaper said citing EH Consulting. In November, property sales by floor area in the key 30 cities decreased by 14% m/m, hitting a new low in a single month over the past six months, and the year-on-year decline further increased to 30%.