MNI China Press Digest July 28: Yuan, Slower Growth, Property

The following lists highlights from Chinese press reports on Wednesday:

• The unusual volatilities in the yuan bond and forex markets this week were likely impacted by sudden events and market sentiments, and may not be systemic or long-term, the China Securities Journal said after the yuan fell below 6.5 against the U.S. dollar on Monday while CGB futures were down 0.35%. Yuan may continue to be supported by foreign investors' increasing interest in Chinese assets, and most recent foreign increases in yuan holdings come from global central banks and sovereign funds, the Journal said citing the State Administration of Foreign Exchange . MNI noted that the Chinese stock market lost CNY4 trillion in the last two trading sessions, and some investors attributed partly to the yuan's recent depreciation, which led to some foreign capital outflow.
• Some Chinese economic growth indicators may slow in H2 due to both easing effects of higher-bases of comparison but also operating difficulties faced by small businesses and structural employment issues, the 21st Century Business Herald reported summarizing published analysis by 10 related government ministries. If averaged over the last two years to ease the pandemic-caused base effect, both investment and consumption in H1 recorded less than 5% growth, the newspaper said. One reason for the PBOC to cut RRRs in mid-July was anticipated weakening in exports and property investments, the newspaper said. Consumption remains below pre-pandemic era, while chip shortages will constrain auto sales, the newspaper said citing the ministries of commerce and industries.
• Sales of existing properties in China may fall in the second half after an increasing number of city authorities have published "reference prices", the China Securities Journal reported. The southeast city Wuxi became one of the first six cities launching the policy, which allows authorities to discourage irregular pricing, improve supervision, therefore stabilizing the property markets, the newspaper said. The price guides are based on the average of the trading prices and renewed once a year to make sure the prices are deemed reasonable, it said. Sales of preowned homes in Shenzhen in June plunged 80% from a year ago after the city enacted the policy early this year, the newspaper said.