MNI China Press Digest Mar 2: Yuan, Special Bond, Digital Yuan

The following lists highlights from Chinese press reports on Wednesday:

• The yuan may not continue to appreciate should the Federal Reserve starts rate hike this month, despite its recent rally coming at a time when China's trade surplus is at a record high and global risk aversion rises on geopolitical conflicts, the Shanghai Securities News reported citing analysts. The strong foundation of the yuan will not fade away quickly in 2022, but may become more flexible in depreciation so to help balance the divergence between China-U.S. monetary policies, the newspaper said citing Zhong Zhengsheng, chief economist of Ping An Securities. Both onshore and offshore yuan reached the 6.31 mark against the U.S. dollar on Tuesday, with the intraday highs hitting 6.3048 and 6.3071 respectively, hitting new highs again since April 2018, the newspaper said.
• Chinese local governments are expected to issue over CNY430 billion special-purpose bonds in March to help advance infrastructure investment to stabilize economic growth, the China Securities Journal reported citing Gao Ruidong, chief economist at Everbright Securities. The issuance of such bonds has been significantly accelerated with a total of CNY877.5 billion sold in the first two months, the newspaper said. Among all, over CNY470 billion were invested in infrastructure projects mainly in the areas of municipal facilities, transportation, water conservancy and environmental protection, which largely increased compared to last Q4, the newspaper cited Gao as saying.
• China will soon unveil its third batch of digital yuan pilot cities, likely to include Fuzhou, Xiamen, and Hangzhou cities, the Shanghai Securities News reported. The pace of opening personal digital yuan wallets has far exceeded expectations, jumping to 20.87 million from 26.1 billion in H2 2021, and the figure will significantly increase following the promotion in Winter Olympics, the newspaper said citing analysts. The pilot program is expected to expand to more cities, with the fourth and fifth batch of pilot cities likely to follow, the newspaper cited analysts as saying.