MNI China Press Digest Jan 20:Consumption, Mortgages, A-shares

Highlights from Chinese press reports on Friday:

• Local governments have increased the use of consumption coupons to increase spending during the Spring Festival, according to the Securities Times. Authorities are offering coupons through partnerships with big-tech shopping platforms, and experimenting with issuing the digital RMB, the paper said. Citing experts, the paper believes the vouchers can achieve targeted consumption objectives, with food, accommodation, travel, shopping and entertainment the sectors benefiting the most from the schemes. Zhejiang province expects to issue more than CNY1.6 billion of consumer coupons in total, the paper said.
• Several local governments in tier two cities such as Jiujiang, Taiyuan, and Tangshan have decreased the lower limit on first time buyer mortgage interest rates to as low as 3.8%, according to Securities Daily. The move follows the recent measure taken by the People’s Bank of China (PBOC) to grant local authorities the power to set their own lower limit on mortgage rates if house prices have fallen year-on-year for three consecutive months. The paper believes more cities will lower their rates in 2023 to support demand and boost confidence. An LPR cut by the central bank is also a possibility, the paper said.
• Foreign investment in A-shares is expected to increase significantly in 2023, as investors seek to capture opportunities from China’s recovery and long term fundamentals, according to China Securities News. The paper said the two-way opening of onshore capital markets, the strong upside potential of A-shares, and government growth policies are attracting northbound flows this year. Citing experts, the paper said the yuan could hit 6.5 against the U.S. dollar by year-end, overall returns on the CSI 300 Index could reach 16%, and GDP growth would be above 5%.