MNI China Press Digest July 30: PBOC, Housing Curbs, Growth

The following lists highlights from Chinese press reports on Friday:

• The People's Bank of China signaled its intention to ensure sufficient liquidity while keeping its prudent stance when it raised the size of Wednesday's OMO reverse repo to CNY30 billion from the usual CNY10 billion but keeping the rate unchanged, the Economic Information Daily said citing analyst Zhang Xu of Everbright Securities. The central bank wants to meet the market's expectations as liquidity demand is expected to rise going into the next month, the daily said. The operation was the second time amounting to CNY30 billion since end-June, it said. The central bank is likely to continue to guide market rates including DR007 around OMO rates, Zhang was cited as saying.
• China's Vice Minister of Housing and Urban-Rural Development summoned officials from five Chinese cities with excess gains in home and land prices and ordered them to toughen measures to control the markets and promote healthier development, reported China Construction News owned by the ministry. The published cities, including the western Autonomous Region Ningxia's capital Yinchuan, Huizhou in Guangdong, and Quanzhou in Fujian, will join a list being monitored by all levels of regulatory authorities, the newspaper said. MNI notes that the central government has stepped up measures preventing high property prices from contributing to hidden risks and social discontent, now that growth is likely on target this year.
• China should properly use this year's "window of low growth pressure," when it is more confident that the economic growth will likely reach or exceed targets set earlier, the People's Daily said in a front-page report, citing government-affiliated advisors. The current macro policy focuses on increasing the resilience of the economic recovery and the quality of growth, the official newspaper said citing Xu Xianchun, a research director at Tsinghua University. Policymakers must focus on boosting domestic spending, Xu was cited saying. While growth is likely to slow in H2 from Q2's 7.9%, the pace should be seen averaged out over the last year and with a long-term view, the daily said. MNI comment: official media have been downplaying the necessity and likelihood of further stimulus this year. Another round of RRR cut seems less likely while fiscal stimulus may also be delayed until next year.