MNI China Press Digest Dec 21: Vouchers, Pork Prices, LPR

Highlights from Chinese press reports on Wednesday:

• Local governments are issuing consumer coupons to boost year-end spending, but the key to expanding domestic demand lies in increasing income, Yicai.com reported. Jiangsu province has issued about CNY500 million in consumption vouchers, with 47 cities and counties in the region releasing 128 fiscal support policies to promote sales. Shanghai has issued CNY1 billion in digital coupons, while Shenzhen city will subsidise 15% of the purchase price of household appliances, Yicai said. It is necessary to increase residential income through multiple channels, increase consumption loans, support enterprises with a strong ability to provide jobs, and alleviate the impact of rising prices on the poor in a timely manner, the newspaper said.
• Pork prices in China have cooled to CNY17 per kg in December, down from around CNY30 per kg two months ago, according to the Securities Times. Hog supply has increased in anticipation of the New Year and Spring Festival, as farmers increased slaughter and the NDRC released supplies from its central reserves. However, demand has cooled more than expected due to the end of Covid-zero disruptions. Over the short term prices will have downward momentum, the paper said citing experts.
• Experts believe China’s loan prime rates need to be cut next year despite quotations remaining unchanged in December, according to the China Securities Journal. The paper said it is necessary to boost demand by guiding the over-5-year LPR lower, thereby reducing the burden on housing expenditure and enterprise financing costs, as well as promoting the steady recovery of the economy. A lower rate on the Medium-term Lending Facility will allow banks to cut deposit rates, which would ease their funding cost pressures and provide room to cut the LPR, the paper said.