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MNI China Press Digest Jan 16: Fiscal, Silver Economy, Growth

MNI (BEIJING)
BEIJING (MNI)

MNI picks key stories from today's China press

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Highlights from Chinese press reports on Tuesday:

  • China will issue CNY1.6 trillion of local bonds in Q1 this year, with new bonds accounting for CNY1.04 trillion and refinancing bonds about CNY600.7 billion, according to experts interviewed by Yicai. The government plans to raise over CNY400 billion of the bonds in January and February, with the remaining majority of funds coming in March, Yicai noted. The government has recently prioritised reviewing the additional CNY1 trillion of special bonds announced in Q4 last year, meaning issuance of local bonds in Q1 will begin slowly. Experts expect authorities to issue CNY9 trillion of local bonds for 2024 in total.
  • Authorities in Beijing have proposed 26 measures to boost the "silver economy" and elderly wellbeing, in a policy document released by the General Office of the State Council for the first time. The government proposes to strengthen fiscal and financial support with greater use of local-government special bonds and utilise the central budget to increase investment scope. Additionally, officials should guide state-owned enterprises to actively expand involvement in the silver economy in conjunction with their main business.
  • China should intensify pro-growth efforts to stabilise expectations and boost confidence, and push for stronger measures as policies have lagged behind the market curve, wrote Guan Tao, former director of the international payments department at the State Administration of Foreign Exchange. In an article published by SAFE's own China Forex magazine, Guan noted the government should play its role as lender of last resort and make good use of the favourable conditions of high private savings and low central government debt, while increasing and optimising fiscal spending. Authorities must also resolve real estate, local debt, small- and medium-sized financial institutions risk, and implement substantive market access reform, opening-up measures, fair law enforcement, and rights protection to promote the private economy.
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Highlights from Chinese press reports on Tuesday:

  • China will issue CNY1.6 trillion of local bonds in Q1 this year, with new bonds accounting for CNY1.04 trillion and refinancing bonds about CNY600.7 billion, according to experts interviewed by Yicai. The government plans to raise over CNY400 billion of the bonds in January and February, with the remaining majority of funds coming in March, Yicai noted. The government has recently prioritised reviewing the additional CNY1 trillion of special bonds announced in Q4 last year, meaning issuance of local bonds in Q1 will begin slowly. Experts expect authorities to issue CNY9 trillion of local bonds for 2024 in total.
  • Authorities in Beijing have proposed 26 measures to boost the "silver economy" and elderly wellbeing, in a policy document released by the General Office of the State Council for the first time. The government proposes to strengthen fiscal and financial support with greater use of local-government special bonds and utilise the central budget to increase investment scope. Additionally, officials should guide state-owned enterprises to actively expand involvement in the silver economy in conjunction with their main business.
  • China should intensify pro-growth efforts to stabilise expectations and boost confidence, and push for stronger measures as policies have lagged behind the market curve, wrote Guan Tao, former director of the international payments department at the State Administration of Foreign Exchange. In an article published by SAFE's own China Forex magazine, Guan noted the government should play its role as lender of last resort and make good use of the favourable conditions of high private savings and low central government debt, while increasing and optimising fiscal spending. Authorities must also resolve real estate, local debt, small- and medium-sized financial institutions risk, and implement substantive market access reform, opening-up measures, fair law enforcement, and rights protection to promote the private economy.