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MNI China Press Digest Feb 7: PBOC, Consumer Loans, SASAC

MNI (Singapore)
(MNI) Beijing

MNI picks key stories from today's China press.

Policy NewsHomepageAPACChinaPolicy StoryStoryRegion
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Highlights from Chinese press reports on Tuesday:

  • The People’s Bank of China drained liquidity from the interbank market after Chinese New Year to mop up a big injection it made before the holiday, but analysts predict the central bank will remain flexible in its open market operations and keep liquidity ample amid the economic recovery in a bid to reduce funding costs, China Securities Journal reported Tuesday. The PBOC drained a net CNY1.44 trillion in the past 8 trading days to prevent the excess liquidity flooding the market as the bank injected a net CNY2.05 trillion in the week before the new year, marking the largest weekly injection in history, the report pointed out.
  • China's banks are accelerating the approval of consumer loans to offset interest margin pressure as the volume of mortgage loans has shrunk and as authorities encourage lenders to support consumption, China Business News reported. The volatility of equity, bond and property markets in 2022 pushed up households' bank deposits, which led to a narrowing in interest margins, the report said. Competition among commercial banks for consumer loans has pushed interest rates down to 3%-4%. With the boom in consumer loans, the risk that the funds from these consumer loan flows into property market, which has been forbidden, needs to be watched, the report warned.
  • The State-owned Assets Supervision and Administration Commission said in a meeting on Monday that it will strengthen investment in key security fields such as national defense and military industry, as well as food and energy resources, to serve the country's major strategies, according to Securities Times. The regulator of state-owned companies stressed it will focus on investment in new infrastructure, urbanisation, transportation and water conservancy. It will work to improve self-sufficiency in key materials, core components, and basic software, it said. Strategic emerging industries and modern industrial chains will be boosted to provide China with competitive advantages.
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Highlights from Chinese press reports on Tuesday:

  • The People’s Bank of China drained liquidity from the interbank market after Chinese New Year to mop up a big injection it made before the holiday, but analysts predict the central bank will remain flexible in its open market operations and keep liquidity ample amid the economic recovery in a bid to reduce funding costs, China Securities Journal reported Tuesday. The PBOC drained a net CNY1.44 trillion in the past 8 trading days to prevent the excess liquidity flooding the market as the bank injected a net CNY2.05 trillion in the week before the new year, marking the largest weekly injection in history, the report pointed out.
  • China's banks are accelerating the approval of consumer loans to offset interest margin pressure as the volume of mortgage loans has shrunk and as authorities encourage lenders to support consumption, China Business News reported. The volatility of equity, bond and property markets in 2022 pushed up households' bank deposits, which led to a narrowing in interest margins, the report said. Competition among commercial banks for consumer loans has pushed interest rates down to 3%-4%. With the boom in consumer loans, the risk that the funds from these consumer loan flows into property market, which has been forbidden, needs to be watched, the report warned.
  • The State-owned Assets Supervision and Administration Commission said in a meeting on Monday that it will strengthen investment in key security fields such as national defense and military industry, as well as food and energy resources, to serve the country's major strategies, according to Securities Times. The regulator of state-owned companies stressed it will focus on investment in new infrastructure, urbanisation, transportation and water conservancy. It will work to improve self-sufficiency in key materials, core components, and basic software, it said. Strategic emerging industries and modern industrial chains will be boosted to provide China with competitive advantages.