MNI China Press Digest July 12: GDP, New Loan, Carbon Emission

Highlights from Chinese press reports on Wednesday:

• China is on track to achieve 5.5% GDP growth this year given low base effects, according to an Institute of Finance, Academy of Social Sciences report. The institute said the economy could have grown up to 7% in Q2 y/y, but the q/q level may be lower. Authorities need to tackle persistent weak demand by increasing counter-cyclical adjustments and expanding fiscal monetary policy to boost market expectations and confidence, the report said. The central bank should cut policy interest rates by a large margin in H2 to combat rising real interest rates which harm the private sector recovery. (Source: 21st Century Herald)
• China’s new yuan loan, rebounding by CNY3.05 trillion in June, hit a record high in the same period, as both corporate and household loans increased significantly. Meanwhile, bill financing decreased, indicating optimized credit structure, said Wen Bin, chief economist of China Minsheng Bank. Loans to enterprises increased by CNY2.28 trillion in June, as rate cut has stimulated investment and production demand and banks rush to boost credit at quarter-end. While loans to individuals rose by CNY963.9 billion, only second to the level in March this year, thanks to the Dragon Boat Festival holiday and mid-year shopping festivals driving needs for consumer loans. The prudent monetary policy will still promote loose credit to achieve the effect of demand expansion which is key to economic recovery, said Wang Yunjin, senior researcher of Zhixin Investment Research Institute. (Source: 21st Century Herald)
• China will improve the regulation of total energy consumption in efforts to reduce carbon emissions as the country constructs a clean power system, according to President Xi Jinping. Speaking at a recent central committee meeting, Xi said the country will transition to a new development pattern based on services and focus on institutional opening up. China needs to enhance reforms of foreign exchange and international cooperation in finance and innovation. (Source: Yicai)