MNI China Press Digest Jan 4: Infrastructure, RCEP, Property

The following lists highlights from Chinese press reports on Tuesday:

• Local governments in China are planning to kick off major projects in Q1, with 16 provinces seeking to issue over CNY550 billion new infrastructure-back special bonds in Q1, China Securities Journal reported. This compares to a total of CNY36.4 billion of new local government bonds issued same period last year. Infrastructure investment is expected to grow 6.5% y/y in 2022 to drive the economy, the newspaper said citing analysts with CITIC Securities. Local authorities will increase project reserve and halve the processing time from approval to start of construction, with investment in new energy, green buildings, pipeline networks and parking lots to increase significantly, the newspaper said.
• The largest free trade agreement Regional Comprehensive Economic Partnership (RCEP) coming into force since Jan. 1 will drive the regional GDP by 2035, as well as boost exports and imports of the region, Yicai.com reported citing a think tank affiliated with the Ministry of Commerce. The Asia-focused trade bloc covering 15 countries will see more than 90% of goods trade in the region gradually achieve zero tariffs. Among which, 57% of China’s export to Japan will immediately enjoy zero tariffs for the first time, and both sides have significantly reduced tariffs on machinery and equipment, electronic information, chemicals and textiles, which is expected to largely buoy trade, the newspaper said citing Ren Hongbin, vice-minister of commerce.
• Chinese property developers will remain cautious about expanding investment in 2022, as it would take three-to-six months for investment after the RRR cuts and other easing signals for real estate financing released at end-2021, said Quanshang China, a social media outlet under the Securities Times. The total land purchase by top 100 developers dropped by 21.5% y/y in 2021, with the ratio of land purchase to sales dropping to a record low in the past five years, the newspaper said citing the China Index Academy. Developers were facing greater debt repayment and cash flow pressure since end-Q3 amid successive financial regulation, and most developers failed to acquire any land in Q4 last year, the newspaper said.