MNI China Press Digest Apr 14:RRR Cut, Rate Cut, Trade Surplus

The following lists highlights from Chinese press reports on Thursday:

• The People’s Bank of China will cut the reserve requirement ratio in a timely manner to to help banks provide credit to increase financial support for industries and small and medium enterprises affected by the pandemic, according to a State Council executive statement late Wednesday. China will boost consumption, promote spending on services such as medical and health care, and encourage purchases of cars and home appliances. Local authorities should gradually increase the quota for car purchases instead of adding new restrictions, the statement said.
• China should implement more expansionary monetary and fiscal policies against the risk of a rapid economic downturn in the short term, Zhang Ming, deputy director of state-affiliated National Institution for Finance Development, said on WeChat. Reductions in the reserve requirement ratios to provide liquidity and interest rate cuts are among the measures needed, said Zhang. China’s monetary policy must be driven by domestic needs and tolerate a moderate depreciation of the yuan against the dollar, which will leave room to lower risk-free long-term rates. China can still tighten controls on capital outflows should the yuan depreciate too fast, Zhang added.
• China’s export growth may continue to decelerate, but import growth will also lag, which will maintain a high trade surplus and support the yuan, according to a report by state-owned investment bank CICC. This will leave room for further monetary easing. With overseas inflation much higher, other countries still have the incentive to buy from China. However imports will continue to be dragged down by the pandemic and real estate market downturn, the report said.