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MNI China Press Digest July 18: PBOC, Beijing, Arctic Shipping

MNI (BEIJING)
BEIJING (MNI)

MNI picks keys stories from today's China press

Policy NewsHomepageAPACChinaEM Policy NewsEM Policy StoryPolicy StoryStoryRegion
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Highlights from Chinese press reports on Thursday:

  • Central bank moves to cut policy interest rates significantly might not solve China’s economic difficulty, the central bank-run newspaper Financial News reported, citing Zhou Qiong, senior researcher at the Shanghai Institution For Finance and Development. Recent market discussion on the PBOC cutting at least 70 basis points would risk stimulating investment and cause overcapacity, alongside hurting banks’ net interest margins, Zhou noted. Japan had shown easing did not solve its 1990s economic challenges when overcapacity remained an issue, with China facing a similar situation regarding its property sector, Zhou added. The PBOC will likely lower interest rates depending on economic and financial conditions with limited downside space given the current low nominal interest rate, said Zhou.
  • Arctic shipping lines need significant investment in new technologies and heavy infrastructure, such as terminal facilities and connecting train services, to make them commercially viable, according to Yang Jie, senior coordinator at the China Communications and Transportation Association. Northern shipping routes remained constrained by technical challenges and a reliance on ice breakers, with current facilities more suited to oil tankers than container shipping, a representative from Xinxin Shipping said. (Source: Yicai)
  • Beijing municipality saw GDP growth of 5.4% in H1, as total retail sales of consumer goods remained flat y/y, and catering revenue reached CNY63.71 billion, down 3.5% y/y. Industry insiders said restaurant competition may intensify in H2 leading to lower profits, with more mid- to high-end eateries launching low cost options. Industrial value added grew 7.1% y/y, with output of EVs, wind turbines, integrated circuits and industrial robots increasing 350%, 66.1%, 13.2%, and 12.4%, respectively. (Source: 21st Century Herald)
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Highlights from Chinese press reports on Thursday:

  • Central bank moves to cut policy interest rates significantly might not solve China’s economic difficulty, the central bank-run newspaper Financial News reported, citing Zhou Qiong, senior researcher at the Shanghai Institution For Finance and Development. Recent market discussion on the PBOC cutting at least 70 basis points would risk stimulating investment and cause overcapacity, alongside hurting banks’ net interest margins, Zhou noted. Japan had shown easing did not solve its 1990s economic challenges when overcapacity remained an issue, with China facing a similar situation regarding its property sector, Zhou added. The PBOC will likely lower interest rates depending on economic and financial conditions with limited downside space given the current low nominal interest rate, said Zhou.
  • Arctic shipping lines need significant investment in new technologies and heavy infrastructure, such as terminal facilities and connecting train services, to make them commercially viable, according to Yang Jie, senior coordinator at the China Communications and Transportation Association. Northern shipping routes remained constrained by technical challenges and a reliance on ice breakers, with current facilities more suited to oil tankers than container shipping, a representative from Xinxin Shipping said. (Source: Yicai)
  • Beijing municipality saw GDP growth of 5.4% in H1, as total retail sales of consumer goods remained flat y/y, and catering revenue reached CNY63.71 billion, down 3.5% y/y. Industry insiders said restaurant competition may intensify in H2 leading to lower profits, with more mid- to high-end eateries launching low cost options. Industrial value added grew 7.1% y/y, with output of EVs, wind turbines, integrated circuits and industrial robots increasing 350%, 66.1%, 13.2%, and 12.4%, respectively. (Source: 21st Century Herald)