MNI China Press Digest July 10: Growth, Swap Connect, Property

Highlights from Chinese press reports on Wednesday:

• China should further implement macroeconomic policy based on achieving this year's economic goals, Chinese Premier Li Qiang has said. Speaking at an entrepreneurs forum, Li said economic growth was affected by more complex factors than before, and strong effort was needed to solve operational problems. Li called for more disruptive innovation with deeper cross-field integration, and said authorities should promote breakthroughs in key core technologies. (Source: Xinhua News Agency)
• The People's Bank of China will allow offshore investors to use onshore bonds under Northbound Bond Connect as margin collateral for Northbound Swap Connect transactions, China Securities Journal reported. Foreign institutions will have broader application of yuan bonds, facilitating greater utilisation of onshore yuan bonds and reducing Swap Connect costs, said Jiang Huifen, deputy director of the PBOC’s Financial Market Department. The PBOC and Ministry of Finance will study tax exemption policy improvements for overseas investors and further optimise the investment process, Jiang added.
• China needs unconventional and more targeted measures to stabilise its property sector and prevent systemic risk, said Lian Ping, director of the Guangkai Chief Industry Research Institute in an Yicai.com article. Lian proposed scrapping home purchase limits nationwide, and significantly lowering benchmark interest rates for first-time mortgages by 1.0 to 1.5 pp. Authorities should establish a CNY1 trillion housing re-lending programme to ease banking pressure, and create a property stabilisation fund with CNY200 billion of initial capital from the central government and additional funds from policy banks, large commercial banks, insurance companies, and asset management companies.