MNI China Press Digest Feb 22: PBOC, Investment, Car Sales

Highlights from Chinese press reports on Wednesday:

• The PBOC will maintain a prudent policy stance in 2023 as it uses targeted policy tools to provide precision support to specific industries, according to the 21st Century Herald. Citing analysts, the paper said the medium-term lending facility (MLF) and loan prime rate (LPR) are expected to remain stable this year, with the central bank using targeted lending tools to support SMEs and innovation. However, other analysts said the economic recovery was still in an early stage, and if data did not soon show a recovery in the private sector, consumption and real estate, the possibility of MLF rate cuts could not be ruled out. While expanding debt this year may lead to a short term increase in macro leverage, over the longer term leverage will stabilise as economic growth returns, according to one policy institute expert the paper spoke to.
• China is a hot spot for foreign investment as January data showed an increase in foreign investment, Vice Minister of Commerce Guo Tingting said in a recent interview with state media. Foreign investment was up 14% year-on-year during the first month of the year, with use of foreign funds in high-tech manufacturing up 8.74% and high-tech services up 5.59%. China will continue to implement policies to stabilise foreign investment, focus investment in advanced manufacturing, energy conservation and environmental protection, as well as the central, western and northeast regions, according to Meng Huating, head of the Foreign Investment Administration Department of the Ministry of Commerce. (Source: Xinhua)
• Retail sales of passenger cars in February are expected to be up 0.7% y/y and 2.4% m/m, according to a statement from the Passenger Car Association. Yicai.com said the positive data showed a normalisation of market demand following January’s disappointing sales that were disrupted by the Spring Festival and residents adopting a wait-and-see approach. Local governments have introduced automobile subsidy policies and consumer confidence will steadily recover, providing a good foundation for the sector into 2023, the report said.