MNI China Press Digest Aug 6: GDP, Total Finance, Digital Yuan

The following lists highlights from Chinese press reports on Friday:

• China is making sure that its goal of preventing risks is aligned with new pro-growth policies, and that leverage is under control when introducing either fiscal or monetary stimulus, the 21st Century Business Herald said commenting on the politburo's emphasis on "cross-cycle" measures in its latest economic meeting. The wording implies an approach not focusing on short-term growth but rather laying a foundation for new growth drivers, such as structural investments that help boost new-energy vehicles, low-cost housing, national pension insurance, and third-child policy, which use leverage to expand private consumption, the newspaper said.
• China's total outstanding aggregate financing in July may have slowed by 0.1 pp to 10.9% y/y, due to slower issuances of government and corporate bonds, the Economic Daily reported citing analysts. The growth rate is now close to the pre-pandemic level and likely to rebound in Q4 due party to faster pace of government bond sales, the newspaper said citing Li Qilin, chief economist of Hongta Securities. Analysts generally expect a looser money supply though are divided on whether the tight credit situation would actually change in H2, the newspaper said. The PBOC may further cut the banks' reserve requirement ratios in Q4 to offset maturing MLFs totaling CNY2.45 trillion, the newspaper said citing Li Chao, chief economist of Zheshang Securities. Some believe the authority will increase lending support for high-end manufacturing, green sectors and SMEs while strictly monitoring the financing in real estate and by local government financing vehicles, the newspaper added.
• China should first allow wider use of its digital yuan to allow more global use of its currency so that it can bypass the traditional financial information and fund settlement system, controlled by the U.S. and avoid having the U.S. monitor its transactions, wrote Qiao Xinsheng, professor of Zhongnan University of Economics and Law in a commentary run by Securities Times. Qiao suggests starting the process from service trade by allowing Chinese travelers overseas to use digital yuan to exchange local currency in China's state-owned commercial banks' overseas branches, the newspaper said. The traditional financial settlement system is based on the U.S. dollar, while the U.S. can have other countries' trade and investment information as well as imposing sanctions on companies and individuals, the newspaper said.