MNI China Press Digest July 5: Invest, Jobs, Property Market

The following lists highlights from Chinese press reports on Tuesday:

• China’s infrastructure investment growth may reach about 10% y/y in 2022 with sufficient supporting funds and projects, higher than the previous expectation of 7% and last year’s 0.4% gain and drive GDP growth by around 1 percentage point, the Securities Daily reported citing Wang Qing, chief analyst at Golden Credit Rating. The newly announced CNY300 billion financial bonds to be raised by policy banks for major projects will help to accelerate the launch of major water conservancy and transportation projects in the second half of this year, the newspaper said citing analysts. By end-May, a total of CNY310.8 billion was invested in water projects, though the country plans to complete over CNY800 billion of projects throughout the year, the newspaper said.
• China’s top priority is to optimise anti-pandemic measures to keep the flow of people and logistics smooth, and increase support for private and small businesses, in particular, transportation, catering, accommodation and tourism, Guan Tao, a former official and now chief economist at BOC Securities wrote in an article published on Yicai.com. The relatively severe unemployment issue is causing an uneven and unstable economic recovery, as the surveyed unemployment rate of 31 large cities recorded over 6% for three consecutive months since March, while the youth unemployment jumped to a new high of 18.4% in May, Guan added.
• China still requires easier policies in the second half of the year to consolidate its property market as developers are under great repayment pressures of over CNY310 billion of maturing bonds, the 21st Century Business Herald reported. Bond financing is expected to be further eased with lower costs in H2, as local authorities give clear support, including the provision of endorsement or insurance mechanisms to smoothen bond issuance especially by private developers, the newspaper said citing Yan Yuejin, director of E-house China Research and Development Institution. The maturity will peak in July with over CNY83 billion bonds maturing, followed by high amount in August and September, and possible debt defaults may increase should developers fail to roll over maturing bonds or home sales remain sluggish, the newspaper said citing a report by CRIC.