MNI China Press Digest Mar 10: Faster PPI, M2 Boost, Housing

The following lists highlights from Chinese press reports on Wednesday:

• China’s PPI, measuring factory-gate inflation, may reverse its current deceleration and begin to rise faster in March, as international crude oil and metal prices surge amid geopolitical tensions, Yicai.com reported citing Wang Qing, an analyst with Golden Credit Rating. February PPI reversed the previous slides to rise 0.5% m/m, a sign of imported inflation picking up, the newspaper said. China should fully release domestic production capacity of energy and heavy chemical industries to help stabilize prices, as well as cracking down on excessive financial speculation, the newspaper said citing Zhang Liqun, researcher, Development Research Center of the State Council.
• The People’s Bank of China, which revealed more than CNY1 trillion of its profits from FX reserves to the central fiscal coffer last night, is likely to create a CNY7.23 trillion increase in M2 this year, or boosting annual M2 growth by 3 pp by yearend, the Securities Times reported citing economist Guan Tao of Bank of China International. The over CNY1 trillion extra liquidity will lower borrowing rates in the real economy, and the liquidity boost through this remittance, to be carried out monthly, differs from an RRR cut, which impacts funding for the medium to long terms, Guan said.
• China may further ease controls over the real estate sector to help achieve the 5.5% GDP target, set at the high end of the expected range, and requiring a more stable real estate development, Yicai.com said citing industry insiders. While the authorities insist on "houses are not for speculation", there will be more support for buying by new urban residents, who move to new cities for jobs or child education, Yicai said. 2022 may also see explosive growth in guaranteed rental housing to accommodate lower-income people, it said. The housing market may recover in the later period of Q2, Yicai said citing analysts.