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MNI China Press Digest July 7: Yuan, Q2 GDP, Home Sales

MNI (Singapore)

The following lists highlights from Chinese press reports on Thursday:

  • The yuan is expected to remain at a reasonable level against the U.S. dollar, supported by the continuous economic recovery in China while the U.S. economy is facing increased pressure, the China Securities Journal reported citing analysts. The dollar index could rise further above 110, as the euro and the pound could further weaken on growth pressure and debt risks in the European economic outlook amid tight energy supplies. This could pressurize the yuan slightly, but any depreciation would be limited and smaller than that in other non-dollar currencies, the newspaper said citing analysts. The dollar index rose above 107 to a new high in nearly 20 years on Wednesday, while the onshore yuan fell only 22 basic points against the dollar, the newspaper added.
  • The Chinese economy likely expanded about 0.9% in Q2, and should set a 4.3% pace this year in a slow recovery from the disruptions caused by Covid-19 outbreaks, reported citing a poll of economists. Infrastructure investment, which could reach at least 6-8% in 2022, will be the main driver, followed by resilient exports and a marginal consumption rebound, the newspaper said citing Cheng Shi, chief economist of ICBC International. But unemployment and weak property investment would still slow down the recovery process, Yicai said citing Zhou Xue, Asia Economist at Mizuho Securities. Economists also raised their expectations for the yuan against the U.S. dollar to 6.68 by the end of July, compared with the 6.7114 reading on June 30, Yicai added.
  • More Chinese cities are relaxing home purchase restrictions by making it easier for people without local household registration to enter their local property markets, in a bid to boost home sales, the 21st Century Business Herald reported. Some major cities including Dongguan, Wuhan, Jinan and Dalian have allowed non-local residents to purchase homes in non-restricted areas, the newspaper said. To further stimulate the market, mortgage interest rates and loan policy could be further eased, as well as issuing home purchase or deed tax subsidies, the newspaper said citing analysts.

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