MNI China Press Digest, Feb 12: Growth, PBOC, Coronavirus, SME

     BEIJING (MNI) - The following lists highlights from Chinese press reports

on Wednesday: 

     China should strive to stabilize 2020 growth at about 5% by raising the

deficit-to-GDP ratio above 3% and issuing an additional CNY1 trillion of special

government bonds, according to an article in the China Economic Weekly. The

Weekly quoted Huang Qifan, vice chairman of the China Center for International

Economic Exchanges and a former mayor of Chongqing city, who also advocated tax

and fee cuts for small companies and transfer payments for areas affected by the

coronavirus outbreak. The central bank should also step up its purchases of

government bonds and further lower the reserve requirement ratio and interest

rates after the epidemic eases in Q2, said Huang. 

     The PBOC is likely to conduct medium-term lending facility (MLF) with a

lower interest rate next week to offset the maturity of a large amount of

reverse repos, the China Securities Journal reports. Citing unnamed analysts,

the Journal says monetary policy will focus on adjusting policy interest rates

and offering targeted support to areas affected by the coronavirus epidemic. The

central bank will still inject certain short-term liquidity to offset CNY1.42

trillion of reverse repos set to mature by the end of February, the newspaper

said. 

     The coronavirus outbreak in China may peak in middle or late February and

then plateau and decrease, according to a report by the official news website

Huanqiu. Citing Zhong Nanshan, China's senior medical adviser who bases the

forecast on mathematical modelling, the report says that it is difficult to

predict the turning point of the epidemic. This would be determined by

prevention work during the peak of people travelling from their hometowns back

to cities for work, Zhong said. 

     A survey on the impact of the coronavirus on small and medium Chinese

companies shows that 34% will run out of cash in a month, while 33.1% can

sustain for only two months. The survey of 995 businesses conducted by Peking

and Tsinghua Universities was reported in the 21st Century Business Herald.

Citing sources at banks, the Herald reported that banks are concerned with the

potential increase in non-performing loans which will constrain them from

lending to small and medium companies. 

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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