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MNI China Press Digest July 13: Platform Economy, PBOC, Yuan

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MNI (Beijing)

Highlights from Chinese press reports on Thursday:

  • Government departments at all levels should create a market environment that supports platform enterprises, according to Premier Li Qiang. At a recent exchange meeting with company bosses, Li said platform enterprises should look forward with confidence, continue promoting innovation and better empower the real economy. Platform firms can boost demand and provide new engines for innovation and employment. Leaders from several firms attended the meeting, including Meituan, Alibaba Cloud and Douyin.
  • The People’s Bank of China will not engage in "flood irrigation," or excessive money supply, for the next stage and continue to implement prudent monetary policy, according to Governor Yi Gang. Writing recently for Economic Research, Yi said the PBOC will continue counter-cyclical and inter-cyclical measures which take into account short-term and long-term economic growth and price stability. China must follow an interest rate and exchange rate policy according to market mechanisms which maintain economic and financial stability and curb systemic financial risks. Authorities will aim to promote a real interest rate that is about equal to the potential economic growth, and improve the exchange-rate system with reference to a basket of currencies, Yi said. (Source: 21st Century Herald)
  • The yuan may stop depreciating against the U.S. dollar, but will not record a strong reversal in Q3, as the U.S. Federal Reserve continues to hike rates, which will support USD in the short term. China may still face economic downward pressure in Q3 with unemployment likely to rise mid-year, while the U.S. job market remains resilient with core inflation at a relatively high level, said Li Chao, chief economist of Zheshang Securities. The yuan may gradually rebound from its floor in Q4 when the domestic economy improves, while the U.S. faces pressure. CNY rose to CNY7.19 on Wednesday, a cumulative increase of over 500bp, or 0.7%, since last Friday. (Source: Jiemian News)
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