MNI China Press Digest July 14: H2 Growth, RRR Cut, Iron Ore

The following lists highlights from Chinese press reports on Wednesday:

• China needs countercyclical policies to keep growth in a reasonable range, help create immediate jobs and resolve cyclical downturn pressure, the Economic Information Daily said citing Liu Xiangdong, an economist with the China Center for International Economic Exchanges. While the economy is recovering, it faces uncertain global and domestic situations, long-standing issues and the pandemic, Liu was cited as saying. Liu commented after the newspaper reported Premier Li Keqiang's speech to a group of economists and businesspeople on Monday. Li repeated his mantra that China will keep monetary policies prudent, fiscal policies proactive, and won't resort to using excessive credit to achieve growth, according to the newspaper.
• China has room to further cut banks' reserve requirement ratios to boost liquidity given the high RRRs held by most banks, the 21st Century Business Herald reported citing Lian Ping, the chief economist at Zhixin Investment Research Institute, who commented after the PBOC cut them by 50 bps across the board last week. For H2, manufacturing investment may become an important driver of economic recovery as industrial companies need to replenish inventories, while financial support to manufacturers will increase, Lian was cited as saying. On consumption, it may be difficult for retail sales to return to pre-pandemic levels due to the continued sparse domestic outbreaks of Covid-19 cases, with retail sales possibly growing 10% y/y in 2021, the newspaper cited Lian as saying.
• There is a growing consensus that China needs to accelerate its iron ore diversification push, as at least 60% of its imports come from Australia, the Global Times said. In the first half, China's trade with South Africa and India both soared, and the iron ore trade was likely a big contribution, the newspaper said. Improving the utilization rate of steel scrap is also a necessary move to reduce dependency on iron ore imports, the newspaper said. China's iron ore imports reached 89.42 million tons in June, down 0.4 percent from May, while the value grew 7.43% to $16.78 billion, indicating urgent need for the diversification, the Times said.