MNI China Press Digest July 19: Consumption, Fiscal, Developer

Highlights from Chinese press reports on Wednesday:

• China’s economy will benefit from a consumption rebound in H2 as various policy measures to expand domestic demand and promote consumption take effect, according to Vice Minister of Commerce Sheng Qiuping. Speaking at a recent press conference Sheng noted new trends had emerged in H1 as consumers increased demand for green energy consumption including electric vehicles and home appliances. Sheng said people were now focusing more on their health with sales of organic food and health products increasing rapidly. (Source: Yicai)
• Fiscal policy should focus on activating the role of the market, which includes improving preferential tax policies to ease companies’ difficulty in a more targeted manner and supporting private investment to better coordinate with government investment, wrote Yang Zhiyong, director at Finance and Taxation Research Center, Chinese Academy of Social Sciences in a commentary. Using large-scale expansion of government-led investment to maintain the size of the balance sheet does not make much sense and it may also lead to serious inflation and further deterioration of the economy. Aimless investment will only bring about a waste of fiscal funds, Yang said. (Source: 21st Century Business Herald)
• More than 60% of listed real-estate companies expect losses in their performance forecasts. Among the 113 listed developers, 67 have released forecasts of which 42 have forecasted a loss in their attributable net profit in H1, while at least half achieved profitability in the same period last year. The most indebted developer, Evergrande Group, has posted losses of CNY800 billion over a two-year period, with CNY686 billion in 2021 and CNY126 billion in 2022, raising the ceiling of losses of Chinese companies to an unprecedented height. (Source: Yicai)