MNI China Press Digest Jan 10: Omicron, Inflation, Rate Hike

The following lists highlights from Chinese press reports on Monday:

• China’s zero-Covid approach will keep the outbreak in Beijing's neighboring city Tianjin from breaching the capital, the Global Times said citing government-affiliated experts. Tianjin, home to 15 million people, started mass nucleic acid testing Sunday morning, after 20 COVID-19 infections were reported in a single day, with two identified as carrying the new variant, said the newspaper. It was the first battle against Omicron in China, creating huge uncertainty and high possibility of a spillover as the source of the outbreak remains unknown, said the newspaper. However, the outbreak is expected to be extinguished before the Spring Festival starting at the end of the month and 2022 Winter Olympic Games in February, Global Times said.
• China’s consumer price index may have decelerated to below 2% y/y in December from 2.3% in November as the prices of vegetables and pork dropped on ample supply, the Economic Information Daily reported citing analysts. Domestic fuel costs also declined as international crude oil prices fell, while the resurgence of the pandemic hindered the rebound of service prices, the newspaper said citing Li Chao, chief economist of Zheshang Securities. China is set to release its latest CPI data on Wednesday.
• China should prepare its macro policies before the Federal Reserve’s upcoming “steeper-than-previously-expected” monetary tightening, the 21st Century Business Herald reported citing a speech by Yu Xuejun, a former official of the China Banking and Insurance Regulatory Commission. The Fed may start hiking interest rates as early as in March, possibly by 25 bps, followed by another three hikes over the year, ex-Minister of Finance Zhu Guangyao told another state-owned newspaper the China Securities Journal.