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MNI China Press Digest July 19: GDP, Policy Coordination

MNI (Singapore)

The following lists highlights from Chinese press reports on Tuesday:

  • The Chinese economy is expected to gradually return to its potential growth level of about 5% and 5.5% in Q3 and Q4, respectively, which may bring the annual growth to 4.1% to 4.5%, the Securities Daily reported citing Wang Qing, chief macro analyst of Golden Credit Rating. Boosting consumption should be a key to drive growth in H2, including the promotion of car and home appliance sales, as well as the issuance of consumer coupons and subsidies to the low-income groups, Wang was cited as saying. Retail sales may rebound to around 4.5% y/y by year-end from the 0.7% decline in H1, the newspaper said citing Wang.
  • China should strengthen the coordination of fiscal and monetary policy to better support enterprises and help stabilise employment, Guan Tao, a former official and now chief economist at BOC Securities wrote in a blog post. China can learn from the practice of the U.S. and the UK to rescue enterprises by providing liquidity support and improving companies’ solvency to help them repair their balance sheets, said Guan. The central bank can also launch new structural tools to support the key areas and weak links of the economy, Guan added.
  • Countries in Asia can cooperate in coordinating the pace of monetary policies to ensure economic and financial stability in the region, rather than simply following the U.S. Fed rate hikes, the 21st Century Business Herald reported citing Zong Liang, chief researcher of Bank of China Research Institute. Countries may rely on capital controls and adjusting the settlement currency to weaken the extensive link with the U.S. dollar, Zong added.

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