MNI China Press Digest Feb 27: Yuan, Housing, Economy

Highlights from Chinese press reports on Thursday:

• China’s currency will likely fluctuate between 7.0 and 7.5 against the U.S. dollar this year as the economy stabilises, despite President Donald Trump’s immigration and tax policies driving up dollar strength, said Zhang Peng, a postdoctoral fellow at the Institute of Finance of the Chinese Academy of Social Sciences. A Yuan depreciation will lack foundation as China implements a more relaxed macroeconomic policy to smooth the economic recovery. (Source: Yicai)
• Local and central governments should cooperate to introduce additional support measures to stabilise the housing market further as early as possible, Securities Times reported, citing analysts. Authorities need to keep lowering housing mortgage interest rates, taxes and fees, said Qin Hong, senior research fellow at the National Academy of Development and Strategy, Renmin University. The central government should assist local officials to recycle vacant land from property developers using local special bonds, Qin said.
• Authorities aiming to boost domestic demand through promoting higher wage levels must not pass the cost onto companies and instead focus on improving labour productivity and the return on investment, according to Liu Yuanchun, president of Shanghai University of Finance and Economics. Liu said officials should study the U.S. Hoover era when the government prohibited firms from reducing wages leading to increased corporate bankruptcies and worsening economic conditions, versus Roosevelt's successful approach of allowing market mechanisms to work while adopting large-scale stimulus policies. (Source: Yicai)