July 13, 2022 02:04 GMT
The following lists highlights from Chinese press reports on Wednesday:
- Chinese developers have turned to domestic markets to raise funds but default risks are still growing as debt maturities peak in July and August, the Securities Daily reported on Wednesday. The financing amount of developers slumped by 56.5% year-on-year in the first half as they have been downgraded due to credit risks, it said. Debt issuance in offshore markets is also shrinking with no issuance in both February and May. As restrictions on the fund-raising in the sector relax and market confidence is recovering, the financing environment is expected to improve in the second half. But for those heavily-indebted developers, the default risk remains big, the report warned.
- China regulators should monitor the use of funds raised through local government special bonds which have been issued at an unprecedented rapid pace this year to boost the economy, China Business Network reported. Some funds have not been used timely and effectively due to lack of projects or have been invested in unqualified projects, increasing local governments debt burdens and risks, it reported. Since 2015, outstanding local government special bonds totalled CNY18.9 trillion. It is expected China would front load part of the quota for 2023 local government special debts later this year to boost the economy, experts said.
- China policy makers will implement supportive measures and make efforts to ensure the economy grows at a good and healthy level, the People’s Daily in its commentary on Wednesday. Fiscal policy needs to be more positive in term of cutting taxes and fees and expanding domestic demand via issuing local government special bonds to boost infrastructure. And monetary policy needs to remain flexible and work to stabilise market sentiment, it said. The authorities needs to prepare additional tools for the new downward pressure to maintain economic growth, it noted.