MNI China Press Digest Feb 24: Recovery, Investment, Debt

Highlights from Chinese press reports on Friday:

• January data on domestic consumption shows the recovery is on track and all parties are confident in the market rebound for this year, according to a statement made by China’s Ministry of Commerce. Additionally, the ministry was aware of dozens of high level multinational leaders planning visits to China this year, which shows positive signs for foreign firms' engagement. The first month of the year also showed overseas investment up 14.5% y/y, indicating international firms’ confidence in China over the long run. China welcomed recent positive developments in the Philippines regarding their entry into the Regional Comprehensive Economic Partnership Agreement (RCEP), MOFCOM said.
• Provincial data shows investment in major projects around China are off to a strong start in 2023 and will play an important foundation in the economic recovery this year, according to Sheng Chaoxun, Director of the China Macroeconomic Research Institute. Guangzhou authorities are targeting CNY1 trillion in fixed asset investment across 2023, and have signed or started projects worth CNY680 billion so far this year. Shenzhen has launched 266 new construction projects with a total investment of approximately CNY329.5 billion in so far in Q1. Sheng said high-quality industrial projects will play a leading role, with 5G, industrial Internet and data centers being a strong focus. (Source: Shanghai Securities News)
• Policies designed to stabilise growth following the pandemic may increase pressure on local fiscal balances and lead to further risks of hidden debt at regional level, according to analysts interviewed by the Securities Times. The paper said work reports by several regional governments this year have highlighted the added risk and have taken measures to step up supervision and monitoring, such as ensuring debt interest and interest rate cuts are fully accounted for in their budgets. According to one analyst, local debt problems could be solved by moving away from the “land sale financing model” to a more self-sustaining basis founded on industrial and commercial activities.